By Femi Adekoya
Despite a favourable geology with mineral resources spread across the country, stakeholders in the mining sector have advocated a favourable fiscal environment that will aid exploration and investment in the sector for improved contribution to the economy.
They noted that worsening insecurity across mineral rich communities in the Northern region and other mining communities continues to undermine production and investment.
According to the stakeholders, despite the glorious past and abundance of mineral deposits, the potential of the mining sector has remained largely underexploited, as the sector’s contribution to GDP only increased from 0.3 per cent in 2018 to 0.6 per cent in 2020, which is still largely below the historical average contribution of about 4-5 per cent in the 1960s-1970s.
Speaking at a seminar organised by the Mining and Solid Minerals Group of the Lagos Chamber of Commerce and Industry (LCCI), the Chamber’s president, Mrs Toki Mabogunje, noted that though the constitution empowers the Federal Government with the exclusive power to legislate on mining and solid mineral matters, several state governments have enactment parallel mining laws and regulations, which has continued to interfere and usurp the powers of the Federal Government and the statutory powers of the Ministry of Mines and Steel Development.
Mabogunje, who was represented by the Vice-President, Mrs Mojisola Bakare, noted that the existing fiscal framework for investors in the mining sector is not friendly enough and does not consider the peculiar nature of the sector, particularly, its long gestation period.
She therefore urged the government to revisit the entire fiscal framework for the taxation of mining operations, to attract mining majors and foreign investors.
Chairman of the Group, Seun Olatunji noted that while Nigeria is making a mining comeback through various government initiatives, dark and illegal export channels need to be checked.
The Minister of Mines and Steel Development, Olamilekan Adegbite, represented by the Permanent Secretary of the Ministry, Dr Oluwatoyin Akinlade, reiterated the need to intensify the promotion of minerals development in the country, considering that the country used to be a mining country.
According to her, Nigeria has favourable geology with mineral resources spread across the country, hence the need to scale up exploration work in a bid to open up the economy.
One of the guest speakers, the Managing Director, Lagos Commodities and Futures Exchange, Akin Akeredolu-Ale, reiterated the need for a robust fiscal framework to encourage investment, noting that so much is being lost through informal mining.
He said: “The transaction size in the mining ecosystem is huge and still untapped. Nigeria has a lot of reserves yet to be exploited. For the capital market to be able to participate, investors will need data. Considering the large deposit of resources we have, crude mining technology undermines the country’s potential.”
The Director General, Securities and Exchange Commission, Lamido Yuguda, represented by SEC’s Executive Commissioner, Operations, Temidayo Obisan, stated that the combination of unfavourable policies affected minerals development, adding that the biggest value leakage is in the middle east.
He argued that the country needs to transform artisanal mining to mechanised mining to make a comeback as Nigeria seeks to diversify the economy.