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From public institutions to organized private sectors, the advocacy is growing and the calls becoming louder on the need to diversify the economy.
This is coming on the heels of dwindling revenue from oil which had been the mainstay of the economy since the early 70s. Experts believed that such diversification will address the problem of foreign exchange shortages and the attendant pressure on the Naira. While some urged the government to redirect its focus to the agriculture sector, others asked the government to explore the numerous mineral resources for alternative source of income.
At the moment, solid minerals mining accounts for only three per cent of the nation’s Gross Domestic Product, GDP, due to the influence of its vast oil reserves. The domestic mining industry is grossly underdeveloped and that necessitated the need to import mineral resources that could be produced at home such as bitumen, iron ore, salt etc.
The Nigeria government is presently controlling the sector but given rights to corporate organizations to mine and sell mineral resources.
Experts believed that the entire land mass of Nigeria contained one type of mineral or the other.
In fact every state of the Federation is blessed with vast mineral deposit waiting to be fully tapped for use as revenue source for the country. The abundant mineral resources are it metallic, non metallic and/ or industrial are available in commercial quantity.
According to KPMG report on the Nigerian mining sector, the country is reported to have as many as 44 different types of minerals in more than 500 locations across the country.
The Ministry of Mines and Steel Development has further classified these minerals into three groups ‘Industrial Minerals’, ‘World Class Minerals’ and World Class Minerals with Strategic Importance for Nigeria.’ This last group includes coal, bitumen, limestone, iron ore, barites, gold and lead-zinc. Coal is abundant in the Middle Belt and South Eastern regions of the country most notably in Anambra, Kogi, Benue and Enugu States. It is estimated to exist in reserves of about 396 million metric tonnes, but unproven reserves may be far greater at 1,134 million tonnes.
The estimated probable reserves of bitumen in Ondo State are 16 billion barrels, while those of tarsands and heavy oil are estimated at 42 billion barrels. The probable reserve of bitumen and heavy oil in the entire tars and belt is expected to double the reserves in Ondo State. The largest and purest deposits of limestone are found in the South West and Middle Belt regions of the country. Limestone deposition in the South West region of Nigeria have been estimated at 31 million tonnes whilst sizeable iron ore deposits have been found mainly in the country’s North West, North East and South East regions.’ The different types of iron ores account for some 882 million tonnes of unexploited ore in Nigeria today. Proven reserves of Barites in just Benue and Nassarawa States have been estimated at 111,000 tonnes while the estimated probable (unproven) reserves across the country, where mining is considered viable, are estimated at over 21million metric tonnes.
In Nigeria lead-zinc ores are usually found together and they are often associated with copper and silver. Lead-Zinc is found along the North East and South West trending belts. They occur in commercial quantities in the North East and Middle Belt region of Nigeria. The estimated reserves are well over 100,000 tonnes of lead and 80,000 tonnes of zinc. Gold is associated with the North West, Middle Belt and South West regions of Nigeria, although there are smaller occurrences beyond these major areas. The preliminary exploration and identification of deposits which is still ongoing has confirmed ten sites to be holding reserves of over 50,000 ounces of high quality gold.
The lack of proper utilization of these vast resources may be attributed to lack of adequate capital to annex the resources or unseriuosness on the part of government to look toward the side of solid mineral resources sector. Apart from these, there are also problems of adequate infrastructural facilities, technical competence and huge investment capital involved in the exploration of the resources.
Currently, the country is exploiting numbers of mineral resources to satisfy the socio economic development starting from the common water to crude oil, bitumen, coal and gas reserves estimated at about 105 trillion cubic feet all of which are from the physical component of the physical environment and could be divided into renewable natural resources and non renewable natural resources. The renewable natural resources include solid and liquid minerals, whose supply is finite and exhaustible.
In 1999, the federal government of Nigeria created ministry of solid mineral development and which has motivated a lot of interest in the sector and provide alternatives sources of foreign exchange to the country and coupled with the fact that petroleum products are unreliable and which is attributable to the crisis in Niger Delta region areas of the country. With the establishment of solid mineral resources ministry, the prospect in the sector become brighter and the foreign exchange from the sector will improve with time.
Alhaji Remi Bello, President of Lagos Chambers of Commerce and Industry, LCCI; said that there had never been a better time than now when revenue from oil is dwindling on daily basis,
”We have always been calling for the expansion of our revenue generation base beyond oil and even agriculture to include solid mineral bearing in mind there is a large deposit s of solid minerals in every parts of the country” the president said
Bello said the Federal Government should as a matter of urgency look in the direction of solid mineral by creating enabling environment to attract needed funding for the development of the sector.
He said that government should as a matter of urgency address the security challenges particularly in the Northeast an so investor would like to invest in a place not safe enough for his fund and considering the fact that solid mineral exploration is capital intensive, foreign direct investments are needed to develop the sector to its full potential level.
Also at the heart of realization of the full potentials of the sector is checkmating the activities of the illegal miners which continued unabated in spite of successive government’s efforts in the last few years to introduce various reforms. The delay in implementing these reforms have continued to give the illegal miners field days in their activities thus shortchanging the country and preventing her from reaping the full potentials from the sector.
Top of the list is security to guarantee the safety of investors as well as creating easy way of doing business in the country.
Agbaje said Nigeria was endowed with enormous solid minerals in almost all states of the federation. He however regretted that the country is presently under exploiting these God given gift, preferring instead to concentrate on oil as major source of revenue.
He called for the deliberate efforts aimed at increasing and ginger solid mineral exploration through various initiatives targeted at attracting foreign direct investments either with 100percent ownership or through joint venture agreement with Nigerian entrepreneur.
According to him, “Mining is a capital intensive industry. Government is expected do more to ensure proper harnessing. An average miner needs about N200m to start” he said. The scenario today is pathetic. Those miners who thought they could start with about N10m are already meeting with disappointment; therefore, funding is a very critical factors every miner to needs. It is still difficult to get money from the banks In Nigeria therefore direct foreign investment seems to be a way out and possibly a partnership with Nigerian Entrepreneurs.
As part of what the government can do to attract foreign investors, Hakeem Agbaje called for favorable tax regime, including a three-year tax holiday to new companies; a reduction in the capital gains tax, from 20 per cent to 10 per cent; companies profit tax from 35 per cent to 30 per cent and internationally competitive fiscal incentive, which should be enshrined in the law.
PRESIDENT, Manufacturers Association of Nigeria, Dr. Frank Jakobs said agriculture and solid minerals should be a major area of focus for alternative income in the face of the declining revenue from the oil sector.
“The falling oil price globally calls for the diversification of the economy of the nation. The fall of oil prices means revenue available to the government will be minimal to the extent that the country can no longer meet its obligation to the citizens.
But it appears that the country had prepared for this before it came, with the proposed Nigeria industrial revolution plan which will help diversify the economy. There are some areas which Nigeria has comparative advantage.
The government should look at solid minerals, emphasize on agriculture to cushion the effect of the continued fall in the price of petroleum products. The labor force should be well trained.
There is need to improve educational standard so that graduates from higher institutions are well prepared to drive the economy. Above all, we must look at the industries that derive their materials locally,” he said.
On government’s plan to also focus on taxes besides raising tariff on luxury goods, Jakob said tax collection should be done with a human face by first providing the necessary infrastructure for the comfort of Nigerians.
The president of the Manufacturers also suggested a cut by 40 per cent in salaries and emolument of public office holders.
However solid mineral exploration in the country has been bedeviled by many challenges which government must address if we are to realize its full potentials.
“Agbaje said Nigeria is endowed with enormous solid minerals in almost all states of the federation. He however regretted that the country is presently under exploiting these God given gift, preferring instead to concentrate on oil as major source of revenue.
He called for the deliberate efforts aimed at increasing and ginger solid mineral exploration through various initiatives targeted at attracting foreign direct investments either with 100percent ownership or through joint venture agreement with Nigerian entrepreneur.
According to him, “Mining is a capital intensive industry. Government is expected do more to ensure proper harnessing. An average miner needs about N200m to start” he said. The scenario today is pathetic. Those miners who thought they could start with about N10m are already meeting with disappointment; therefore, funding is a very critical factors every miner to needs. It is still difficult to get money from the banks In Nigeria therefore direct foreign investment seems to be a way out and possibly a partnership with Nigerian Entrepreneurs.
As part of what the government can do to attract foreign investors, Hakeem Agbaje called for favorable tax regime, including a three-year tax holiday to new companies; a reduction in the capital gains tax, from 20 per cent to 10 per cent; companies profit tax from 35 per cent to 30 per cent and internationally competitive fiscal incentive, which should be enshrined in the law”
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