Nigeria: Govt to Increase Mining Sector Contribution to GDP

14 February 2020

Minna — The Federal Government on Thursday unveiled plans to increase the mining sector's contribution to the nation's Gross Domestic Product (GDP) from the current less than one per cent to five per cent before the end of this fiscal year.

The plans align with the government's much-publicized agenda of diversifying the nation's economy by turning the non-oil sector into its driving hub of productivity and revenue generation.

The sector, which used to contribute up to seven per cent to the GDP, now adds less than one per cent due to sustained over-reliance on the oil sector.

The Minister of State for Mines and Steel Development, Dr. Uchechukwu Ogah, gave this projection in Minna, Niger State, when he paid a courtesy call on the state Governor, Alhaji Abubakar Sani Bello.

The minister who was in the state for an interaction with miners, said he was at the government house to create synergy between the state and the Federal Government on the mining sector, as well as to look at possibilities of creating enabling environment for the sector to grow rapidly.

He said, "The Mineral sector constituted seven per cent of the GDP in the past, but now it is less than one per cent. We are planning to get up to five per cent before the end 2020. Niger State is one of the key states with mineral potentials.

"People take up licenses without properly mining. We are already sensitising investors on mining potentials in Niger State, and we want the governor to help the ministry preach the gospel. The ministry is aware that you can help the miners to create enabling environment to surmount the security challenge.

"I want to say here that it is not only royalty and derivation that is the benefit, if we come together, we can build a stable economy so that we won't have mono economy, while as a state you can participate in mining.

"We hope to reach other governors through you because we are ready to work with states and local governments since we cannot achieve our target without states and local governments support."

But then, despite the minister's assurance, industry observers are skeptical about the feasibility of the target in view of past experiences when government officials had set similar targets without meeting them.

In his response, Gov. Sani noted that synergy between the federal and state governments was key to addressing most of the challenges militating the growth of the sector.

He explained that, "With synergy we will be able to share ideas and solutions. No doubt, insecurity is a major challenge, and that is why state governors are in serious trouble because mining sites have become terror sites, it has become basis for creation of security threat.

"I have had sleepless nights because of migration of illegal miners into the country through the state. And it is unfortunate that both federal and state governments are not making anything out of it as a result of the illegal miners. We are getting less 10 per cent of what we are supposed to get. No control mechanism on the activities. Royalty is a serious joke to the governments, I must say.

"Collaboration and synergy is very key because the state will know the number of those who are licensed and states should even be contacted to advise them on location before licensing."

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