27th April, 2017
Dr Kayode Fayemi, Minister for Solid Minerals and Steel Development, has a big assignment. He is to revive the dead mining sector and make it an alternative revenue source for the Federal Government. Nigeria has never, in its history, been in need of diversification like this! This is because, given the activities of militants in the Niger Delta (who bombed pipelines with no more efforts than stepping on maggots), which affected oil outputs and the fall in its price in the world market, revenue from that sector plumetted. The minister, therefore, is like one of the doctors who have been assigned to revive a patient in a coma and make him his family’s bread winner again in a short time. Apart from this, he is to see to it that despite that mining is on the exclusive list, inividuals and states can legitimately make money through it. In his words: “We need to bridge the gap between law and reality and that is why we decided that we must help those informal miners (as we call them) to become formalized and we must support them with access to finance, tools, technical knowledge, skill development that can enable them upscale their activities. In other words, we must help miners, rather than letting them remain in that rudimentary level where middle men come to cheat them out of the little they get…” Here is the full interview that Fayemi granted ADEMOLA ADEGBAMIGBE and YOMI OSOBA
Q: We congratulate you again on your position and the big task given to you to help diversify the economy. Now what are the challenges you met when you became minister and how have you been able to overcome them?
Well, first it is too early to start talking about overcoming the challenges met. You know Nigeria has been obsessed with the attention given to oil and gas over the last four decades and that has taken our eyes off the ball as far as other sectors like mining is concerned. So, coming to a sector that has been neglected and underfunded, the deep seated challenges in the sector would not be overcome overnight. Although, I came into it with a very clear mandate from the president, which is to reverse the neglect and improve the fortunes of the sector particularly in terms of job creation and revenue generation. To demonstrate his own commitment, Mr President also sent two ministers to a Ministry that has been hitherto superintended by a single minister since 1995 when it was first created.
Before then mineral resources used to be a part of petroleum ministry or part of the Ministry of Mines and Power, from the time of the late Alhaji Shetimma Ali Monguno in the first republic and under subsequent Ministers until General Abacha created the Ministry of Solid Minerals Development in 1995 with Alhaji Kaloma Ali as its first Minister. Coming to the challenges, they were many. We met a Ministry that was not only underfunded, in which staff morale was at its lowest but also one in which motivation was lacking. We met a Ministry in which significant work had gone into making the legal framework attractive to investors and comparable to any around the world, but one in which enforcement of those laws left a lot to be desired.
We met a legacy of litigations on key assets of government under the Ministry’s supervision, particularly Ajaokuta steel Plant, the National Iron Ore Mining Company, Itakpe, the Aluminium Smelting Plant in Ikot Abasi to mention a few. We met a Ministry that is deficient with regards to the availability of bankable geological data for prospective mining investors and a Ministry that was experiencing a very tense relationship between the Federal Government, States and the host communities. The challenge of illegal mining and its concomitant effect on safer mining practices was also there. This is not exhaustive, but these were the major issues met.
And what have you done so far to overcome these challenges?
Well I have given you about 4, 5 challenges that are very central to turning around the sector. The challenges create the larger challenge which is the perception that Nigeria is not a mining nation. The smaller challenge or the practical challenges give vent to that view in the minds of investors when they talk about Nigeria. They say Nigeria is not a mining nation, forgetting that Nigeria has the fourth largest reserve of bitumen in the world, and the second largest of iron ore deposits in Africa, there are abundant coal resources. There is limestone all over the country; we have moved from being an importer of cement products to being self-sufficient and now an exporter. Many of these things are not even known to the ordinary Nigerians , let alone to outsiders. So the challenge of perception is very key and that is also why I am talking to you because media organisations play a critical role in influencing public opinion about what is happening across the board. We are often accused of not talking enough in this government to the media or communicating our achievements.
So, how have we resolved the specific challenge of insufficient funding? This is not a sector that has to depend exclusively on government funding and our vision as encapsulated in our roadmap (that’s the first thing we developed coming into office) is that government will play the role of an enabler and not an operator. An enabling role for us includes providing access to finance for genuine miners. We developed a road map that sets out in very clear terms what we want this sector to become and how we want to get there. But in terms of what government has been able to do with regards to insufficient funding, you will notice that funding in this sector has significantly improved, yet it is not where we want it to be. But when I became minister in November 2015, the budget of 2015 was just coming to an end in terms of implementation. This ministry had an allocation of 1 billion naira, for its capital expenditure, out of which the Ministry was only able to access N352million – not even 50 percent of what was appropriated.
We witnessed a significant shift in the 2016 budget that we prepared and capital funding moved from N1billion to almost N8 billion. By December we had almost received 50 percent of that N7.3 billion that was allocated to that sector for capital expenditure. That is a major jump in percentage terms. With the 2017 estimates currently before the national assembly, capital expenditure proposals doubled to N13 billion from last year’s N7.3billion. That is just federal budget allocation, we have also been taking additional steps for the first time in this sector. The sector has benefited from the natural reserve development fund (which had never been given to this sector before this current administration) with the approval of N30 billion as an intervention fund for exploration, strengthening capacity, providing access to finance for artisanal miners.
We took that bold step and the president approved it and the federal executive council ratified the president’s approval and we have N30 billion now to assist in focusing more on exploration activities. This is because mining is research. If you don’t search you don’t find and you don’t know what you have. It is only when you carry out geological prospectivity that you will have a sense of what you have. Everybody will tell you that oh Nigeria has mineral resources all over the place but they can’t tell you the specific place where those minerals are, in what quantity they are, whether they are commercially viable or not.
Read more at:http://thenewsnigeria.com.ng/2017/04/solid-minerals-how-states-and-individuals-can-make-billions/http://thenewsnigeria.com.ng/2017/04/solid-minerals-how-states-and-individuals-can-make-billions/