The Minister of Mines and Steel Development, Olamilekan Adegbite, has expressed the willingness of the Federal Government to support mining firms in a bid to grow the economy and create jobs for Nigerians.
The Minister, who made this known during a facility tour of Segilola Gold Project, Iperindo, Osun State, said the government, through the Ministry, has provided a number of incentives to businesses and investors to spur growth in the sector.
Some of the incentives include waiver on customs and import duties for plant, machinery and equipment imported for mining operations; tax holidays of between three and five years for businesses. Others are free transferability of funds and permission to retain and use earned foreign exchange; capital allowances of up to 95 per cent of qualifying capital expenditure; deductibility of environmental costs (money meant for environmental remediation will be tax free) and 100 per cent ownership of mineral properties.
He said: “We want to make Nigeria a major gold producing hub in Africa and this is why the administration of President Muhammadu Buhari has given so much support to this sector to ensure that we diversify our economy away from oil.”
Earlier, the Managing Director/Chief Executive Officer of Segilola Gold Project, Segun Lawson, stated that despite the challenges brought about by the pandemic, the company’s target production date had been slated for the second quarter of the year. He also said the company targeted to produce an average of 80,000 ounces of gold yearly for the lifetime of the mine. Lawson revealed that the company had created 500 direct jobs and 1100 indirect jobs.
“Despite the challenges of constructing during the pandemic, we have ensured that all our facilities are built to world class standards,” he said.
He also stated that in keeping with its Corporate Social Responsibility (CSR) in the community, the company had awarded 26 secondary school and tertiary institutions scholarships running into several millions of naira.
According to the President Muhammadu Buhari led government, key areas it wants to focus on in the management of the national economy includes,
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We would streamline the cost of government and improve efficiency of public service delivery across the Federal and Sub-national Governments.
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Targeted spending on innovative social programmes and infrastructure, including social infrastructure.
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Direct and model economic policies away from oil and towards non-oil revenues as global demand for oil decreases and supply increases
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Focus on delivery of basic services to the Nigerian population upon which business can be built and improved standard of living can be achieved.
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Build revenue capacity across Sub-national Governments by increasing IGRs to reduce dependence on the Federal Government.
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Alignment of fiscal and monetary policies across medium and long-term goals.
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Increase investor confidence in Nigeria.
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Increased revenue mobilization and plugging of leakages.
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Greater focus on Power, Transport, and Housing because these areas help to create wealth.
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Strengthen institutions of government across board including tackling corruption.
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A financial sector that is strong, resilient and able to support the real economy.
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Inclusive and sustainable growth – mobile communication, film industry, financial inclusion, among others.
This government is committed to prudently managing and stopping waste and leakages in the system, there will be no room for duplication of offices and responsibility; the Buhari led government has shown that, it is its desire that everybody benefits from the goodies.
Agriculture, mines and steel present the quickest means of diversifying Nigeria’s mono-economy, according to experts. Running with this idea, the Federal Government has emphasized mines and steel at every possible juncture. Despite this emphasis, the sector has only boosted the Federation Account by N2bn in 2016. The minerals and mines sector has contributed N2bn to the Federation Account in 2016, according to information obtained from the Ministry of Mines and Steel Development. Compared to the role expected of the sector in a diversified economy, the revenue made from the sector for sharing by the three tiers of government is negligible. The Federal Government had never hidden the fact that it looks up to the solid minerals sector and agriculture for the much needed diversification of the economy, given the significant reduction in the earnings from the main base of the nation’s economy, oil. In realization of the nation’s need for diversification, the Muhammadu Buhari-led government has continued to emphasize the need to exploit the solid minerals sector in order to increase the earning capacity of the country.
The government signified its interest in the solid minerals sector in the articulation of the 2016 budget. It increased the capital budget of the sector seven times, from N1bn in 2015 to N7bn in 2017.
So, will the mining sector begin to make a significant contribution to the coffers of the nation? Will the nation make the much sought transition from a mineral-rich state to a mining destination? Stakeholders believe that incremental revenues are possible but they add that the best this administration can do is to lay the necessary foundation blocks for eventual growth because the transition will take a little more time than anxious citizens are willing to allow.
The government alone has the right, power and competence in geological survey. It is an accepted fact that the rate of development in the solid mineral subsector depends on the extent to which the Geological Survey Department carries out its duties in providing land, aerial and geophysical survey data on the mineral resources of the nation.
It is the duty of the Department to identify the locations of mineral resources, undertake primary exploration to yield the initial indications of the size, quality and nature of the occurrences of minerals, and carry out detailed investigation on whether further and fuller exploration could be undertaken by prospective investors.
The Ministry of Solid Minerals Development should establish a data bank containing such information of location and quantity of solid minerals; Such data should be made available to prospective investors in the form and on terms that would facilitate private investment in the subsector.
Government should take the responsibility of marketing the information on the potentials of the subsector, using the country=s foreign missions abroad to reach prospective foreign investors.
The data should include details of incentives provided by the government. It is necessary that the government should offer financial support to private operators for the rapid development of solid minerals. This is particularly essential for small and medium scale miners. As a matter of fact this need has been generally accepted. What is unsettled is the channel for such assistance. However, overall the economy will improve tremendously and the people will benefit maximally.
Ayobolu is a Lagos-based public affairs analyst
