A Constructive Examination
By Abdulsalam Omuya
The appointment of members to the Federal Executive Council (FEC) by President Bola Ahmed Tinubu, just 56 days into his presidency and the allocation of portfolios along with policy objectives to kick-start his “Renewed Hope” agenda has been a hot topic in recent times.
Different perspectives have emerged on whether these appointees are suitable for their ministerial roles, considering their qualifications, experiences, innate abilities and their grasp of the necessary knowledge to deliver expected results. These debates have sparked discussions and interest across various sectors in the country. Some analysts contend that the president made astute choices in matching ministers to ministries based on their qualifications, fields of expertise, unique experiences and natural abilities. However, others argue that many appointments do not align well with the ministries, resulting in square pegs in round holes.
Beyond these discussions, some ministers have hit the ground running, while others are still grappling with the challenges of their new roles, uncertain about how to proceed—whether to run, walk, loiter, or nap.
Fortunately, the Ministry of Solid Minerals Development boasts one of the lucky appointments—an experienced professional and adept communicator. Mr. Dele Alake, who began his career as a journalist, has a broad range of knowledge. After a successful tenure as the managing editor of the former Concord newspaper, he has taken on this new responsibility.
Since assuming his role, Alake has made a bold statement, one that has drawn the attention of many stakeholders. He declared his intent to increase the mining sector’s contribution to the GDP to an impressive 50 percent. This is an ambitious goal that has left many wondering about its feasibility.
While the size of the minister’s dream is impressive and deserves commendation, it is essential to examine whether such a target can be achieved, given the current state of the sector. To do so, we must first understand the sector’s historical performance.
Historically, even during the colonial era when the sector was considered prosperous, Nigeria’s solid minerals sector never contributed more than 7 percent to the nation’s revenue. In the ‘60s, this figure dropped to approximately 4.5 per cent, only to rise to 5.6 per cent in the ‘80s. Since then, there has been no significant improvement, and the sector’s contribution has generally been on the decline.
According to a 2021 industry report by the Nigeria Extractive Industries Transparency Initiative (NEITI), Nigeria generated a modest revenue of N193.59 billion from the solid minerals sector in 2021. Although this represents a significant increase of N60.32 billion or 51.89 percent compared to 2020, it is crucial to note that the sector contributed less than 1 percent to the national GDP, accounting for only 2.62 percent of total revenue and 0.24 percent of total exports. Over the last 15 years, the sector has generated a mere N814.6 billion in revenue, indicating that it is far from being a major revenue earner for the country.
Given these figures, it is clear that the mining sector is not poised to achieve the minister’s ambitious target of contributing 50 per cent to the GDP anytime soon. While his enthusiasm and passion are apparent, it is essential that the foundation for such growth be properly laid. But, this is the same old rhetoric that every previous Minister for Mines and Metals has trotted out in international conferences and has resulted in zero international investment.
Alake has outlined a seven-point agenda to delve deeper into the sector, estimated to be worth $35 billion – this is according to data from Boston Consulting Group. In spite of this, the sector contributes less to gross domestic product (GDP) compared to at least 10 percent on average across countries in sub-Saharan Africa. Key initiatives include the creation of the Nigerian Solid Minerals Corporation, entering joint ventures with mining multinationals, leveraging big data for specific priority minerals and their deposits, providing a 30-day grace period for illegal miners to join artisanal cooperatives, establishing a mines surveillance task force and mine police, conducting a comprehensive review of all mining licenses and creating six mineral processing centres to focus on value-added products. These initiatives are commendable and could be instrumental in achieving the minister’s ambitious GDP contribution projection.
However, several questions and concerns must be addressed. For instance, can Nigeria afford to establish a Solid Minerals Corporation at this moment, especially when there is consistent clamouring for the merger of some government agencies? What lessons have we learned from the collapse of the former Nigerian Mining Corporation (NMC), and how can we avoid repeating the same mistakes? What criteria will the minister adopt to select qualified individuals to run the corporation? Will these selections be based on merit or political considerations?
Additionally, where are the mineral reserves or ongoing exploration projects that can lead to mineral production, especially of high-value minerals? Is the minister aware that many hundreds of exploration projects may result in only a handful of potential mines and [that] these may take many years to materialise?
Encouragingly, the minister has initiated efforts to send Nigerian mining professionals to Australia for knowledge acquisition, following a meeting with Hon. Bill Johnston, the country’s Minister for Mines and Petroleum, Energy, Corrective Services, and Industrial Relations of the government of Western Australia. Australia is renowned for its vast knowledge and experience in this field. But what is the fate of Nigeria institute of Mining and Geosciences, Jos?
However, we must scrutinise the outcomes of similar initiatives in the past. Have these investments yielded positive results and contributed to sectoral development? It is crucial that we move beyond theoretical knowledge and focus on practical, hands-on training that exposes professionals to the intricacies of the field.
Investment in exploration is also vital to provide investment-grade data on reserve deposits and their locations. Investors require reliable data to make informed decisions. The Nigeria Geological Survey Agency (NGSA) needs consistent funding to generate the data the minister intends to utilise. The likes of Dangote Group, BUA Group, and Segilola Resources Ltd and some coal companies have success stories to tell because they have invested in quest for data. You will recall that the National Integrated Mineral Exploration Project (NIMEP) was funded through NGSA to produce exactly the data the Minister is proposing. Where are the international investors resulting from this expenditure? It is worth noting that the sector predominantly involves the production of construction minerals such as limestone, clay, laterite and aggregates, which have limited monetary value from which government can generate revenue.
To achieve the minister’s ambitious goal, Nigeria should focus on offering commodities the world demands, such as lithium and other critical minerals. Nigeria is said to possess significant deposits of these minerals, which are in high demand globally. Shifting the focus to these minerals can attract international investors and rejuvenate the sector. Unfortunately, lithium is not on the minister’s list. Do we have these minerals? Yes, and in large high quality deposits as the Jupiter Project in Kaduna State has made clear with a global scale, high grade resource.
In conclusion, while Alake’s passion and enthusiasm for the mining sector are evident, critical issues must be addressed and strategic investments must be made. Continuing with outdated methods and expecting different results is not a viable strategy. The mining sector requires practical, sustainable solutions that stimulate growth, create jobs and contribute significantly to the GDP. After all, the honorable minister should know that his proposed development should not be targeted at the sector alone but the local human resources as well. It is our hope to move beyond the age long claim of our “potential” in the sector and that the minister’s zeal remains unwavering until his vision for the mining sector becomes a reality, setting the stage for future administrations to build upon his achievements.
Omuya, a field exploration geologist and publisher/Editor-in-Chief of ‘The Rock Post’ magazine, wrote in from Abuja, Nigeria.
