“The Nigerian government is targeting $5bn in mining investments over the next 10 years under a new industry roadmap, as part of a broader drive to diversify revenue sources away from non-oil sectors.”
Exclusive interview with Mr Aminu Suleman Takuma, Deputy Director, Co-ordinator, Zonal Offices, State Co-ordination Department, Nigerian Investment Promotion Commission (NIPC). Mr Suleman is a conference panelist at the upcoming Nigerian Mining Week in Abuja in October.
1) Let’s start with some background on the NIPC, there is a proud history there.
The recent drop in global crude oil price and the persistent efforts of the Federal Government of Nigeria to diversify her economy and move away from overreliance on the oil and gas sector have made Nigeria a fertile ground for investments. In spite of the attempts of both Government and indigenous companies, the telecommunication, energy, tourism and hospitality, agriculture, security, manufacturing, real estate, transport, banking, mining sectors are still nascent and promises foreign investors rich returns on investment. With a huge population, large land mass and encouraging government policies, the Nigerian market is indeed an untapped gold mine.
It is for this purpose that the Federal Government enacted the Nigerian Investment Promotion Commission Act (“NIPC Act”) which created Nigerian Investment Promotion Commission (“NIPC”) to advice the Federal Government on policy matters designed to promote the industrialization of Nigeria; enhance the investment climate in Nigeria for investors; identify specific projects and invite interested investors for participation in those projects; maintain a liaison between investors and ministries, government departments and agencies, institutional lenders and authorities concerned with investments as well as assist incoming and existing investors by providing support services.
NIPC provides services for grant of business entry permits, licenses, authorization and incentives in a one-stop shop environment. NIPC’s One Stop Investment Centre offer general information and data on the Nigerian economy to facilitate informed investment decisions, facilitate post entry approvals, licenses and sector-specific permits with government agencies and general advisory services on profitable investment opportunities in Nigeria including matching investors requirements with opportunities available in the 36 States of the Federation and the Federal Capital Territory. NIPC issues visas at the entry point to investors who may not have time to visit Nigeria Embassies abroad.
A foreign investor registered with NIPC is guaranteed unconditional transfer of dividends or profits attributed to the investment, payments in respect of loan servicing where a foreign loan was obtained and remittance of proceeds and other obligations in the event of a sale or liquidation of the investors’ business or any interest attributable to the investment. Any dispute between an investor and the Government in respect of investments in Nigeria is settled by negotiation between the parties and as a last resort submitted to arbitration at the option of the aggrieved party.
2) What does your position entail?
As Deputy Director, I undertake the overall coordination of the activities of the Operations Division and the Unit Heads in the Head Office, to ensure that goals and objectives are met.
3) What are some of the projects that the NIPC is involved in that you are most excited about currently?
Investments in Telecommunications, Food Processing, Logistics, Warehousing, Retail Investments, Trailer Parks, etc.
4) What in your view have been the main challenges for the mining sector in the last year?
Studies, we do not have studies on the quantity and quality. We have estimates as against actual facts and figures.
5) What role can die NIPC play to promote the mining sector?
Nigeria has a variety of mineral deposits creating a basket of as yet undeveloped reserves across the country ranging from Tin, Columbite coal, Barite, Bentonite, Gold, Bitumen, Limestone, Iron ore, Tantalite, Granite, Gem stones, Lead, Silver, Lithium, Gypsum, Marble.
Mining and mineral exploitation will receive increasing attraction from government policy makers as the push to diversify the economy away from Hydro carbon reliance continues.
The relative underdevelopment of the sector in industry terms creates an opportunity for foreign and domestic investment. Currently, the NIPC provides the following investment incentives:
– 3-5 years Tax Holiday.
– Deferred royalty payments.
– Possible capitalization of expenditure on exploration and surveys.
– Extension of infrastructure such as roads and electricity to mining sites, and provision of 100% foreign ownership of mining concerns.
6) What is your vision for this sector?
The Nigerian government is targeting $5bn in mining investments over the next 10 years under a new industry roadmap, as part of a broader drive to diversify revenue sources away from non-oil sectors. This sector will generate more revenue to Nigeria if given the needed attention, which the government is presently trying to do. To help achieve these targets, the Ministry of Mines and Steel Development (MMSD), formerly the Ministry of Solid Minerals, is recommitting to investment incentives, rolling out regulatory changes and increasing access to financing.
The recently unveiled roadmap maintains the three-year tax holiday, as well as exemptions on import duties for mining equipment -– incentives first implemented under the previous administration, but re-authorized in the new roadmap. The government would continue to allow 100% foreign ownership in the sector.
The roadmap also stipulates the creation of a new independent regulatory agency, which will assume the collective roles of the existing regulatory bodies in the sector, including the Inspectorate, Environmental Compliance and the Artisans and Small Scale units of the ministry. This in turn will allow the MMSD to focus on facilitating investment and development.
This regulatory agency is already in place.
What distinguishes this roadmap, which builds on the old roadmap that was approved by the council in 2012, is its determination to set up this independent regulatory agency, which investors have been insisting on that the ministry, which has been serving as facilitator, should also not be the one that regulate them.
Plans are also under way to make more funds available for investors, with the Federal
Executive Council approving a N30m ($98,522) mining intervention fund in last year in mid-October. In addition, the partly state-owned Bank of Industry has pledged to increase financing in the sector.
7) How important is the Nigeria Mining Week as a meeting place for the sector?
Very important, extremely important as it will create more awareness to both the government and the private sector the importance of the sector.
8) What will be your message at the event this year?
Currently, mining companies in Nigeria are required to have a community development
program, as well as local consent in order to obtain a mining license, in part to ensure local communities benefit from nearby mining operations. The new roadmap focuses on working with communities to encourage financial participation and develop educational opportunities as part of the plan’s short- and long-term goals. My message would be for the local investors to seek foreign interventions for expertise countries and to also focus on talent importation.
9) Anything you would like to add?
Nigeria – which derives about 13% of its GDP from crude oil production – has been affected by sustained low global oil prices, with the IMF forecasting a 1.8% economic contraction for 2017 – the first full-year decline since 1991 – resulting in a push to diversify revenue sources.
To this end, Nigeria is looking to expand the base of its mining sector on the back of new finds, such as the nickel deposit in Kaduna State, which the government predicts could create $400bn in revenue. MMSD estimates that there are 44 different types of minerals identified in 500 locations across the country. Limestone reserves in the south-west are about 31m tones while iron ore reserves are estimated at just over 880m tones.