Speaking in Abuja yesterday, the acting-President of Nigeria Prof Yemi Osinbajo, stated the mining sector is to receive US$600 million of investment funds through amongst others, the Nigerian Sovereign Investment Authority, and the Nigerian Stock Exchange.
Osinbajo expressed his optimism towards Nigeria’s recently launched Economic Recovery and Growth Plan; the country will achieve its target of 7% economic growth rate by 2020, with more aggressive growth rate of 8.54% for the mining sector.
The acting-president stated the sector will contribute $27 billion to the country’s GDP in 2025.
All images courtesy of Kenyan government and mining cabinet secretary, Dan Kazungu
Despite signs of recession and low global commodity prices, the Nigerian mining industry has certainly witnessed some phenomenal developments within the past 10 months, but a lot of progress still needs to be made to develop the sector, and bring about the required grass root impact for a country in dire need of alternative sources of foreign exchange.
In August 2016, the mining road map was approved by the president and a bill proposing the creation of a regulator will be the next step for the development of the industry.
The new legislation includes incentives such as allowing full foreign ownership of mining projects in order to attract investments and economic growth.
Nigeria now has an elected leadership. This is sending a strong message to local and international players if the government commits to develop the best out of the sector. The Ministry of Mines and Steel Development updated its ‘Roadmap for the growth and development of the Nigerian mining industry’ in 2016 in order to provide transparency, highlighting the use of its mining assets to drive domestic industrialisation and then migrate to winning in global markets.
Nigeria is ranked as one of the largest economies in Africa and predicted to be in the top 20 world economies by 2020. The challenges encountered with the collapse of the Naira against the US dollar have impacted the local market. Nevertheless, the Securities and Exchange Commission has acted to protect investors and make the capital market more attractive with a N5 billion Investors Protection Fund with the Central Bank of Nigeria. The goal is to provide effective systems for settlement of transactions and licences.
Technological and infrastructure
The Nigeria mining sector is currently facing a severe lack of power and infrastructure backing up mining activities, however foreign and local companies are putting expertise and technology together to mitigate productivity losses. A cooperation agreement was recently signed between South Africa and Nigeria to provide technical expertise in order to support the industrialisation of the sector.
Deep work needs to be done regarding customs and getting goods into and out of Nigeria, as well as getting rights to mining territory. During the revision of the mining roadmap it has been highlighted that Nigeria’s government would focus on the reinforcement of existing laws such as the Mining Police, skills and capability constraints, coordination with key Ministries, clarity in governing laws, and insuring a fiscal framework (tax regulation).