Modupe Gbadeyanka
By Modupe Gbadeyanka
It is no doubt that a lot has not been tapped from the mining industry in Nigeria, but the present government is focusing its attention to this just as it is doing with the agricultural sector.
At the moment, it is estimated that the contribution of the sector to the Gross Domestic Product (GDP) of Nigeria is $13 billion.
But the Ministry of Mines and Steel Development says it hopes to push this to about $27 billion by 2025.
This was revealed in the Ministry’s Road Map released on Sunday in Abuja, which was posted on its website and analysed by Business Post.
According to the Ministry’s roadmap, the impact on GDP will be significant as industries are able to use the output of the sector better, substituting for imports.
It also noted that the successful execution of the mining plan with unlock significant value for Nigeria and the net outcome will be creation of thousands of direct jobs and potentially hundreds of thousands of indirect jobs.
The Ministry said it would execute this roadmap in stages with the first focused on bringing stability to the sector and rebuilding the country’s market confidence between 2016 and 2018.
The second phase will focus on establishing Nigeria as a competitive African mining and mineral processing centre from 2016 to 2020, while the third phase will enable Nigeria compete in the global market for refined metals and minerals from 2018 to 2030 in addition to selected ore exportation.
“To ensure effective execution of the roadmap, a committee has recommended the formation of a Mining Implementation and Strategy Team (MIST) that will be the process owner of the roadmap and will be accountable for its implementation.
“MIST, as an advisory team to the Minister, will work across multiple MDAs, stakeholders and private institutions to ensure that the full potential of the minerals, mining and metals sector is achieved,” the Ministry said.
Recall that in 2015, the sector contributed approximately 0.33 percent to the GDP of the country. This contribution is a reversal from the historically higher percentages (about 4-5% in the 1960s-70s).
However, following a decade of reforms starting in 1999, this contribution represents a cautiously optimistic restart of the development of the sector.
The decade of reform saw key changes including, the passage of a new Nigerian Minerals and Mining Act (2007), a Nigerian Mineral and Metals Policy (2008), the creation of a modern Mining Cadastre system, the refinement of the tax code, and the expansion in airborne mapping of the country to sharpen knowledge of the mineral endowments. As important as these progress steps have been, Nigeria can and should do more.
The sector faces several challenges with geosciences data and information, Industry participants, Stakeholders, Institutions, Governance and other enablers of the sector.
According to the National Bureau of Statistics (NBS), gour sub-activities make up the Mining & Quarrying sector: Crude Petroleum and Natural Gas, Coal Mining, Metal ore and Quarrying and other Minerals.
On a nominal basis, the sector grew in the Fourth Quarter of 2016 by 54.68% (year on year). This was substantially above the growth rate recorded in the corresponding quarter of 2015, when a contraction of -35.12% was recorded.
This increase may be attributable in part to negotiations with militant groups in the Niger Delta region, who had been vandalizing oil infrastructure, but who reduced their attacks in the fourth quarter following these series of negotiations.
Coal mining and Metal ore activities in nominal terms, recorded growth rates of 14.16% and 24.24% respectively, significantly higher than the third quarter growth rates of 1.06% and 17.11% respectively.
The Mining & Quarrying sector contributed 7.10% to overall GDP during the fourth quarter of 2016, higher than the contribution recorded in same quarter of 2015 at 5.18%, and its contribution in the preceding quarter of 6.23%.
In real terms, Mining and Quarrying sector recorded a decline of -12.04% (year-on-year) in the fourth quarter of 2016. Although this is significantly smaller decline than that recorded in the previous quarter, of 21.64%, it is nevertheless 3.99% points lower than the growth rate recorded in the same Quarter of 2015 of –8.05.
The contribution of Mining and Quarrying to Real GDP in the fourth quarter of 2016 stood at 7.32%, representing a decline of 0.89% points relative to the corresponding quarter of 2015 and also a decline of 1.02% points relative to the third quarter of 2016.
