Nigeria: Post COVID-19 - World Bank, PwC, Others Task Govt on Galvanizing Mining Sector to Cushion Economic Shocks

(file photo).
1 June 2020

Abuja — The World Bank, Price Waterhouse Cooper, PwC, and Nigerian Institute of Mining and Geosciences, NIMG, Monday, tasked the Federal Government on galvanizing the mining sector to cushion economic shocks in the post-COVID-19 era.

The organizations made this known in a statement signed by the Media Officer, Mineral Sector Support for Economic Diversification, MinDiver, Project, Ishaku Kigbu, while at a crucial session on Day 3 of the Virtual Mid-Term Review (MTR) of the Mineral Sector Support for Economic Diversification (MinDiver) Project under the Ministry of Mines and Steel Development, to look at the role of mining sector in minimising the impact of COVID - 19 and the global oil crisis.

They advised the government to focus and harness the economic potential of the sector as oil prices continue to dwindle in the global market, which they also highlighted some solid minerals that have high demand at the international market including battery minerals, cobalt, lithium, gemstone, and jewelry, barite, phosphate, and others.

Barites are needed and use the oil industry; phosphate for the fertilizer industry and limestone for manufacturing of cement for the construction industry.

According to the statement, the overall objective of the MTR is to review the progress of the MinDiver project with the World Bank, stakeholders of the Ministry, and other key actors, as well as look at new ways of integrating mining into the mainstream economy to build Nigeria's resilience to shocks.

It also disclosed that the meeting held on Thursday, May 28, as part of a six-day MTR schedule planned for an overarching strategy for executing current and planned activities to achieve the project development objectives of MinDiver, the Ministry and the mining sector, experts believe identifying strategic minerals in line with the current dynamics of market demands as to what minerals investors need to invest in relation to international and domestic demands of investors.

The Task Team Leader on the MinDiver Project at the World Bank in Washington, Mr. Mike Stanley, advised that Nigeria should not delay and wait for oil prices to rebound as it may not be feasible as expected, because there is the possibility for the market to experience an oversupply of the commodity from other oil-producing countries including Saudi Arabia.

Stanley also asserted that oil before now indicated decline since 2014, hence, it has become imperative for the Nigerian government to deeply have a rethink on focusing on developing the money-spinning and revenue-generating solid minerals including iron ore, limestone for water carbonates, lithium, cobalt and generally thinking out of the box to attract investment.

He also added that there is a need to deepen development through the iron ore and steel deposits on the Central Economic Corridor.

"Nigeria should begin to think of a need to develop a One-Stop-Shop and understand what investors need and want as well as focus on value-added processing which will, in turn, create jobs without being moved out of the country in this COVID period", he stated.

Habeeb Jaiyeola of Price Waterhouse Cooper, PwC, in his presentation stated that with the stark reality of the Nigerian economy facing recession due to the lockdown, the nation must begin to prepare post-Covid -19.

Jaiyeola said, "As a mono-economy dependent on oil, which unfortunately has gone down without assurance of going up, and attendant limited markets for exports due to falling in global demand, the Nigerian government must begin to see the mining sector as essential."

He further stated that the Federal Government should take advantage of current challenges, see how to revitalize and revamp the nation's mining sector with smart plans, implementations, and activities that would rescue the economy from going down with the downward trend of oil.

He also stressed the need for the ministry to effectively strategize in order to pluck loopholes in terms of revenue and payment of royalties, especially now that the sector has a crucial role to play to keep the economy afloat.

According to him, mining companies should step up in royalty payment including taxes directly into government coffers with evidence of accurate royalty data provided and presented, and also should closely collaborate with relevant MDAs in order to avoid any form of short-changing the government.

For the sake of transparency, he urged corporate organizations in the sector to carry out reliable and correct financial reporting and also align with the mining council, look at issues related to multiple levies which discourage miners from paying correct levies to government treasury and support/strengthen artisanal miners.

On other issues, he emphasized the need for government and stakeholders to focus on downstream of the sector now and faster in harnessing the potential it holds for the sector and the economy generally, and not just on extraction including intensified efforts on minerals that are strong that can drive the economy, and then value addition through local processing, for instance for the growing jewelry industry.

On the part of Professor Bolaji Hassan of the Nigerian Institute of Mining and Geosciences, NIMG, Jos, developing the steel sub-sector will create an enabling ground during the post-COVID -19 era for the mining industry to develop as desired and expected, but without it will be difficult for that to happen.

Hassan further stated that the development of Itakpe iron ore has become very imperative in view of the present realities, and pointed out that it has become absolutely necessary for the Ministry to engage the National Steel Resources Development Agency, NSRDA, to come on board for the development of iron ore.

In his opinion based on present economic situation and reality, the by Federal Government move to resuscitate and revamp Ajaokuta Steel Company is a step in the right direction.

However, he said Ajaokuta Steel Company cannot develop without iron ore and steel of which Nigeria has in Itakpe and the Agbaja Cast Steel in Kogi State.

He also added that despite the global oil price challenge barite remains useful for the oil industry in terms of drilling the commodity and should be classified as a mineral for the future.

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