7-Point Agenda.......part 3

In the recent phase of the oil and gas not meeting up to expectations to cover the 2023 budget, it is therefore imperative for us to look into other directions capable of delivering growth, stability, and improvement to our dear nation. 

Solid mineral sector I believe should be given attention to strengthening the economy. 

There was a time in this nation when the number of barrels produced per day was on the brink of 2 million per day, but it is quite unfortunate now that the sector struggles with 1.4 Million barrel per day when the budget implementation forecast rest on 1.8 Million barrel per day. 

No doubt, the federal government must look into sectors like solid minerals to support the nation. As it stands, the extractive industry still adds less than 1% to the GDP, and recent happenings show the bright fortune of the industry and what is capable of achieving for the whole nation. 

The 7-point agenda recently announced by the honorable minister of solid minerals – Hon. Dele Alake is a clear indication of what is expected to happen in the upcoming days in the industry. 

In my previous posts, I have been able to air my view on the 7-point agenda, listing four major agendas and what could be done for effective implementation of the agenda. 

In this third post, I will explore other agendas and possible ways to implement them for the benefit of all stakeholders involved. The remaining points have been identified to be problems that when served with possible solutions could bring about efficiency in the industry. They are as follows:

• low technical capacity 

• Lack of access to financing 

• weak inter-governmental and inter-agency coordination, and weak Federal/State relationship

LOW TECHNICAL CAPACITY

I was recently listening to an interview with Prof. Zacheus Opafunso – the current Registrar/CEO of COMEG (Council of Nigeria Mining Engineer and Geoscientist), who shared his view on why it is necessary to upgrade the members on mineral report writing and why it is very important to increase technical capacity in the industry. He further reinstated what the council is doing to use the Australian and Canadian Mineral report standard as an adopted standard. He reported the importance of improving technical capacity, and what COMEG and other Societies are doing to improve on technical capacities of their members

In the same vein, the recent development of the honorable minister’s visit to Australia is also in the aspect of strengthening the technical capacity of geoscientists and Mining engineers through technology transfer. This development has been hailed and recognized as the right step in the right direction towards the 7-point agenda. 

In my view more about also be done to the artisan. They currently drive the industry. Integrating them into this plan will also go a long way. Mandating their cluster to get trained regularly will be helpful.  

LACK OF ACCESS TO FINANCING

Mining is capital-intensive, and it takes big capital to make enough capital. If oil and gas sectors thrives well today, it's because the industry provides investors an opportunity to participate in a growth-oriented equity market that boasts exponential profit margins for the long term. This is done through the purchase of industry-focused mutual fund shares.

In working towards the 7-point agenda, the honorable minister has notified the incorporation of Nigeria Solid Mineral Corporation which will help both foreign investors and local investors. They are set to help local businesses seeking funding abroad and help to authenticate their investment proposal to speed up the commitment of their partners to invest. They will also engage the Nigerian financial system, which has demonstrated palpable reluctance to support mineral prospecting and mining because of the long-term gestation of value generation by developing a Fund to facilitate investments in mining at interest rates that will be mutually agreed upon. 

Personally, these views are good, but a careful operational analysis and implementation have to be followed so as not to look like a caricature of the description. A proper extension of this idea should trickle down to the artisan too, since they currently drive the sector. I believe if all quarters work as expected, the program plan will be successful. 

WEAK FEDERAL/STATE GOVERNMENT RELATIONSHIP

The Constitution of the Federal Republic of Nigeria gave the Federal Government the right of ownership of minerals, that is, the Federal government is poised with the responsibility to oversee the permission of minerals, allocation, and the collection of the royalty – meaning the minerals belong to the federal government. The state, on the other hand, has the right to all land tenure laws. It means that the federal government has properties on land covered by tenure laws. This is usually the contradictory and misguided opinion that has opened doors for double taxation, and unlawful demands leading to an abrupt end of mining operations, consequently reducing revenue. 

I think there should be a mutual understanding between state and federal government conclusion on the minerals. They should come to agreement on what would benefit all parties putting investors view on point. Their coming together should encourage investors to come to conclusion on a win-win approach. 

The federal government’s position on this matter is clear. The Ministry of Solid Mineral Development under the watch of Mr. Dele Alake has made it compulsory to make the federal/state relationship of mutual benefit. It will subsequently come with ideas that will lead to a win-win situation. 

Thanks for reading the article. Your comments are welcome.