The solid mineral sector continues to make paltry contributions to Nigeria's revenue despite the promises of successive administrations to use it to diversify and boost the economy.
The solid mineral sector was a critical sector of the Nigerian economy, making significant contributions to its growth and Gross Domestic Product (GDP) until the discovery of crude oil in the country. Mining once accounted for approximately four to five per cent of Nigeria's GDP in the 1960s and 1970s.
The commercial exploration of crude oil by the Nigerian government led to a gross neglect of the non-oil sector, including solid minerals and agriculture, which was the mainstay of the nation's economy in the pre-crude oil days.
Successive administrations, including the immediate-past Muhammadu Buhari's All Progressives Congress (APC)-led administration between 2015 and 2019, made pronouncements and feeble attempts at economic diversification. However, little was achieved, as crude oil sale is still the number one money spinner for the country, contributing to over 80 per cent of its revenue base.
To underscore the little contribution of mining to the country's GDP under Mr Buhari's government, PricewaterhouseCoopers (PwC), in its 2023 report tagged 'Nigerian Mining Progress, but still a long way to go', said the sector contributed a mere 0.17 per cent to the country's GDP between 2018 and 2022. This little contribution contradicted the former president's verbal commitment to leverage the comparative advantage in the sector to Nigeria's economic benefit.
The Bola Tinubu administration, also elected on the platform of the APC, whose mantra is 'change', has also promised to reduce the country's dependence on crude oil through economic diversification, especially by taking advantage of the country's abundant solid minerals.
Shortly after his inauguration as the Minister of Solid Minerals Development, Dele Alake declared that mining could be Nigeria's second growth factor if the necessary things were done. While his appointment as a minister did not surprise many, being a long-standing associate of President Tinubu, his deployment to the solid minerals ministry was a shock, given that he is better known for his pedigree in the Nigerian media ecosystem. Many had thought he'd be the Minister of Information. Mr Alake has, however, said he is eager to help the president optimise the country's huge potential in solid minerals.
To achieve his stated mission of making mining the country's second growth factor, after crude oil, Mr Alake unveiled a seven-point 'Agenda for the Transformation of the Solid Minerals Sector for International Competitiveness and Domestic Prosperity', to guide his tour of duty at the ministry.
The seven-point agenda captures 'Creation of the Nigerian Solid Minerals Corporation', 'Joint Ventures with Mining Multinationals', 'Big Data on Specific Seven Priority Minerals and their deposits', '30-day grace for illegal miners to join artisanal cooperatives', 'Minerals Surveillance Task Force and Mine Police', 'Comprehensive review of all mining licences', and 'Creation of six mineral processing centres to focus on value-added products'.
With under a year in charge of the solid mineral sector, Mr Alake has only had a short time implementing the seven-point agenda. But he is one minister who uses every opportunity, at home and abroad, to engage his audiences with his activities, which he maintains are geared towards the execution of the policies and programmes enshrined in the agenda. He reels out the challenges slowing down progress while seeking assistance from those who can help.
Challenges facing the mining sector
According to PwC in the 2023 annual report, the challenges hampering the full actualisation of the huge potential of the mining sector include illegal mining, insecurity and smuggling.
These challenges, including mining licence racketeering, duplication of consent letters from host communities, lack of beneficial ownership disclosure, and regulatory bottlenecks, which extend to issues with the Nigerian Minerals and Mining Act 2007 and other policies, are as old as the sector.
Speaking recently during the opening session of an investigative hearing of the Senate Committee on Solid Minerals, Mr Alake identified poor funding for mineral exploration and insecurity as the main challenges impeding the development of the mining sector.
Concerning poor funding, citing figures from Standard and Poor's report, the minister said Nigeria only invested $2.5 million in mineral exploration in 2023, a paltry sum compared to some other African countries. In fact, S & P, a global rating agency, ranked Nigeria's exploration budget 12th in Africa and placed Cote d'Ivoire in the top position with $147 million while Congo came second with $133 million.Alake's seven-point agenda to the rescue?
Will the seven-point agenda of Mr Alake be the silver bullet to rescue the mining sector from the scourge of the challenges confronting it and reposition the industry as one of the pivots of the economic diversification policy of the administration within the broader context of the Renewed Hope Agenda of President Tinubu?
Observers say it is too early in the day to assess the efficacy of the agenda. However, PREMIUM TIMES is aware that the Ministry of Solid Minerals Development proposed N70 billion to invest in mineral exploration that will cover the entire Nigerian landscape. But this reporter, as of the time of filing this report, could not immediately verify how much has been released for the exploration project so far in the year.
Mr Alake said the mining exploration business is too huge to be left in the hands of the private sector alone. Nigeria's mining sector, as of today, is characterised mainly by artisanal and small-scale miners.
To tackle the twin menace of illegal mining and smuggling, Mr Alake has set up a Mining Marshal Corps - comprising 2,220 officers drawn mainly from the Nigerian Civil Defence Corps, with 60 operatives reportedly distributed across the 36 states of the federation and the Federal Capital Territory (FCT), Abuja.
The mining marshals have one task: To curb illegal mining. They can do this by arresting and prosecuting perpetrators of acts considered to constitute economic sabotage impacting negatively the revenue-generating capacity of the country.
Recently, some of the operatives deployed to Kogi State reportedly arrested some illegal miners attempting to escape with their booty.
Mr Alake said a 30-day grace given to illegal miners to join artisanal cooperatives was a persuasive and non-kinetic strategy to dissuade them from engaging in the illicit act and to formalise their activities. Since the ultimatum elapsed, about 152 cooperatives have been formed in their various locales according to the minister.
Aside from the artisanal cooperatives and mining marshals, the ministry is also embarking on advocacy through Artisanal and Small (ASM) extension officers and launching a campaign against illegal mining and smuggling on at least 113 radio stations nationwide.
But critics of both the persuasive and coercive components of Mr Alake's broad strategy to contain illegal mining and smuggling say the measures are not enough to tackle the 'big boys' allegedly involved in the illegal acts. There are allegations that the main illegal miners and smugglers have connection in high places, just like those involved in crude oil smuggling and oil pipeline vandalisation.
The minister had in the past blamed some unnamed 'powerful Nigerians' as the brains behind illegal mining in the country, using their gains to fuel banditry and terrorism, especially in the northern part of the country.
The critics also contend that the minister must do much more to go after the big perpetrators and their collaborators within and beyond the shores of the country and put mechanisms in place to checkmate what makes illegal mining attractive. The deployment of security agencies, including military personnel, to the Niger Delta region of the country to protect crude oil facilities has not eliminated pipeline vandalisation or illegal refining of crude.
To facilitate the ease of doing business and to curb licence racketeering to attract more investors into the sector, the ministry is doing a comprehensive review of mining licences. Last year, in November, the ministry revoked over 1,600 dormant miming titles for non-payment of statutory fees as part of reforms in the sector. This year, it has revoked 924 more dormant licences and imposed various fees or fines for renewal of the licences. The areas affected include exploration mining, small-scale mining and quarrying. But again, some industry experts have said the minister has no power to cancel mining licences or titles.
In addition to the above, for investors seeking information about Nigeria's mineral resources, facilities and infrastructures, the ministry has launched a comprehensive one-stop-shop software platform called the Nigeria Mineral Resource Decision Support System(NMDSS). It is a communication tool to enhance government strategy to ease business in the solid mineral sector.
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While launching the platform recently in Abuja, Mr Alake said the portal would expand access of prospective investors to critical information on Nigeria's mineral deposits, policies guiding the mining sector and incentives for investment from anywhere in the world.
Highlighting its cost-saving opportunities, the minister said prospective foreign investors will save the cost of travel and accommodation by logging on to the website to find answers to their enquiries. The NMDSS portal can be accessed here.
There is no big data yet on the specific seven priority minerals and their deposits across the country, nor has Mr Alake been able to establish the six mineral processing centres, presumably across the six geopolitical zones to bring value addition to the entire mining value chain in the country.
Also, there has not been any recorded joint venture with multinationals on his watch, though the minister has been shopping for foreign investors, including during his visit to Riyadh, Saudi Arabia, last year to lure Saudi businessmen to look at Nigeria's mining sector where gold, lithium and other strategic and green minerals abound in commercial quantity.
A solid mineral corporation similar to the NNPC Ltd, which Mr Alake proposed, has also yet to take off. Perhaps those will be his priorities as he trudges on in the ministry. He is serving at the pleasure of President Tinubu, who has promised Nigerians hope amidst biting economic realities and excruciating hardship occasioned by skyrocketing inflation resulting from his economic policies and multiple taxations.
Nigeria's mineral deposit is worth some $700 billion, according to Mr Alake, though he also said the country loses about $9 billion annually to illegal mining, smuggling and other factors.
He has his work cut out if he wants to make the mining sector the fulcrum of Mr Tinubu's economic diversification policy. To achieve that, he needs to block the leakages and make the sector investment-friendly by eliminating all bottlenecks - bureaucratic and non-bureaucratic alike.
