Nigeria Can Generate N5 Trillion Annually From Mining – Fayemi
Nigeria’s Minister of Solid Minerals, Dr. Kayode Fayemi has said that an analysis conducted by major stakeholders in the solid minerals sector, the Association of Metal Exporters of Nigeria, indicates that Nigeria can generate at least N5 trillion annually from mining and exporting of its vast solid mineral deposits.
He stated this in his keynote address at the opening of the 5th International Mining Investment Conference/Exhibition on Nigeria, which started in Abuja yesterday, with the theme, ‘Connecting the Global Mining Industry to the Opportunities of the Solid Minerals Sector in Nigeria.’
The minister said: “Based on current data, Nigeria’s solid minerals sector only makes up about 0.34 per cent of gross domestic product (GDP).
“While that is significant, it is much smaller than its true potential as the vast majority of our mining assets have yet to be exploited.
“According to one of the major stakeholders in the solid minerals sector, the Association of Metal Exporters of Nigeria, we can generate at least N5 trillion annually from mining and exporting of its vast solid mineral deposits, with several multiplier effects on job creation, state development and social infrastructure that could position the solid minerals sector as the main catalyst for national development.”
Fayemi noted that should Nigeria successfully implement the proposed recommendations, growth is expected to return to the sector in the form of new exploration activity, operations and production from active mining, functional and expanded processing and refining capacity, and higher value-addition in exports.
“The net outcome will be the creation of thousands of direct jobs and potentially hundreds of thousands of indirect jobs. We anticipate contribution to mining GDP to exceed $25 billion by 2026 as industries are better able to use the output of the sector, substituting for imports,” he added.
The minister, however, lamented that the sector was faced with both internal and external challenges which include the lack of viable geosciences data and information, low industry participants, institutions and governance
On the external challenges, he said: “Asides the negative perceptions about the Nigerian investment environment is the turmoil besetting the global commodities market as key sources of demand that supported decent prices over the past two decades have steadily declined.
“This has put mines and mining houses under immense pressure which is reflected in the sharp decline in the share prices of major industry players such as Glencore, Anglo-American and Rio Tinto. “Naturally, as the prices of metals and their assets plunge, many of the top mining houses are pulling back from investment planning, shutting down mines and optimizing current operations. This greatly affects our prospects for new entrants into the Nigerian mining space.
He, however, stated that in spite of the above-mentioned challenges, the sector was resolved to overcome them and fulfill its mandate.
“As things currently stand, in 2015, the sector contributed approximately 0.33 per cent to the GDP of the country. This contribution is a reversal from historically higher percentages (about 4-5 per cent in the 1960s-70s).
“Our policy goal is to return to a contribution level of 5 per cent -7 per cent over the next 10-15 years, and the recently approved Medium Term Expenditure Framework (MTEF) and the Fiscal Strategy Paper (FSP) is very supportive of this aspiration.
Also speaking the vice president, Prof Yemi Osinbanjo, who was represented by the special adviser to the president on Economic Matters, Dr Adeyemi Dipeolu, said: “The conference is important because it is coming at a time when the world is mired in economic crises, which requires a synergy of efforts to restore goals and normalcy.
“The administration of President Buhari has consistently advocated and pursued the formidable policy of diversifying the Nigerian economy from over reliance on crude oil with the current economic downturn. It had become imperative that we focus on areas of comparative advantage, like agriculture and solid minerals development.”
While urging the participants to bring up strategies of engagement, he assured that the federal government, through the Ministry of Solid Minerals Development, had developed a roadmap to provide the basis for some key initiatives which had been identified as crucial to the success of the sector.
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