How foreigners are taking over the mining sector to the detriment of Nigerians | Guardian news from Nigeria

• The annual loss of $10 billion due to illegal mining worries stakeholders
• The Senate focuses attention on the problems of the mining sector

The Senate hearing on the challenges facing Nigeria’s mining sector raised more issues than expected. Illegality, insecurity, politics as well as the domination of the sector by foreigners to the detriment of Nigerians were some of the several other issues that came up during the three-day hearing. The Senate was also informed of the producers’ refusal to pay a total amount of royalties running into trillions of Naira.

The hearing, which took place three months after the Economic Community of West African States (ECOWAS) parliament warned that Nigeria was losing 91 percent of its revenues to illegal miners, was an eye-opener to the drive for economic diversification in the country.

At a summit organized by the Parliament on “Illegal Mining and its Consequences on the ECOWAS Region,” the Speaker of the Parliament of the Economic Community of West African States, Mohamed Tunis, revealed that Nigeria was losing 91 percent of its revenues from the mining sector to illegal miners.

Tunis said a staggering 80 percent of mining in the country’s northwest region is conducted illegally, costing the nation 91 percent of potential mining revenues.

“The mining sector has the potential to contribute 7.5% to Ghana’s GDP, 10.2% to Burkina Faso’s GDP, 4% to Côte d’Ivoire’s GDP, while Nigeria receives only 9% from this sector, with 80% percent of mining in the north the western region of the country is being carried out illegally,” he said.

This confirmed an earlier House of Representatives report that estimated annual revenue losses in the mining sector at around $9 billion. Last week’s Senate public hearings showed that figures for annual revenue losses in the sector had risen to about $10 billion.

Deputy Speaker of the House of Representatives Ibrahim Abdullahi Halims, who sponsored the motion to launch this investigation, expressed concern over the “loss of revenues from unregulated and illegal mining activities that cost the government $9 billion annually, with only three percent of royalties paid by a few licensed miners , which makes it difficult to use the country’s mineral resources.”

The major revelation that rocked the Senate hearing room was Senate President Godswill Akpabio’s claim that foreigners earn more from mining solid minerals in the country than Nigerians.

Akpabio stated this in his speech before announcing the opening of the hearing:

“The need for a comprehensive review of the inputs and outputs of the Nigerian mining industry in light of its overall role in economic diversification, foreign exchange earnings and social inclusion” in Abuja.

The public hearing was organized by the Senate Committee on Solid Minerals Development, chaired by Senator Sampson Ekong (PDP – Akwa Ibom South). Akpabio further added that foreigners, after mining solid minerals and making the most of them, often leave behind tales of woes, including insecurity.

He said it was time for the country to take advantage of the mining sector, while calling on stakeholders to discuss the challenges that hinder the development of the mining sector and propose further solutions.

Akpabio said: “The Senate resolution that led to the investigative hearing highlights the critical role that the mining industry plays in our pursuit of economic diversification. We can no longer ignore the enormous potential of the mining sector in this country.

“The mining sector should already become the main cornerstone for the country to earn foreign exchange.

“It will even be a catalyst for social inclusion and social empowerment.

“As usual, as in fishing, more foreigners earn more in the mining sector than Nigerians. Ultimately, they leave us with tales of misfortune and killings to get into minefields, worsening our country’s security situation.

“This country is very blessed with a lot of solid mineral resources. It has the potential to become a global power in the mining sector.
“This investigative hearing gives us the opportunity to ask difficult questions, identify challenges and develop effective strategies to overcome them.” Akpabio appealed to all stakeholders present at the event to actively engage in the deliberations of the hearing.

“Your knowledge, concerns, perspectives, insights and recommendations are invaluable in shaping the future of the Nigerian mining industry and propelling our economy towards new horizons.

“Let us engage in constructive dialogue, share best practices and seek innovative solutions that will bring the mining sector into the very lifeblood of our economy,” Akpabio said.

In his welcome address, Chairman of the Senate Committee on Solid Minerals Development, Senator Sampson Ekong, said the inquiry aimed to identify bottlenecks and opportunities in the mining value chain, develop strategies to enhance local content and value addition, and improve the sector’s contribution to foreign exchange gains and economic growth. Other goals include ensuring social inclusion and community development and promoting sustainable mining practices and environmental management, he added.

“What is worrying is that as a country we have failed to properly maximize the advantage of our enormous funds. The nation loses so much every day to illegal, unaccounted for and undocumented mining.

“There are also growing concerns about the misuse of our natural resources to fuel insecurity. All this must be checked as part of our collective effort.”

In his presentation, the Minister of Solid Minerals Development, Dr. Dele Alake, stated that while the solid minerals sector has been consistently generating gains in terms of revenues, these revenues are not sufficient to meet the development needs of the country.

Alake said: “Now the reason why the problem remains until tomorrow, which is the nation’s dependence solely on oil, is because of the free flow of petrol dollars.

“We have therefore closed our eyes as a society to other critical sectors that could stabilize and improve Nigeria’s infrastructural and technological development.

“So we had free flow of oil, we became quite lenient and biased. But as the Senate President said, that’s history. The global trend forces us to shift our focus to the solid minerals sector in this country because we really have no choice but to open up this sector and of course give it the much-needed life, that is, breathe life into this sector because there is so much in the world other countries that have no oil have no choice but to rely solely on their solid minerals. And they thrive, they move forward, and they are more developed than us.

“So what was blocking Nigeria’s economic progress, especially in the solid minerals sector? Again, this is because we choose to divert our attention. Now that the global trend away from fossil fuels, oil and minerals has forced us, and global warming conditions have also forced the world to shift its attention away from global warming industrialization.

“Green energy is the watchword of the modern world. And what are the things that stimulate and sustain green energy? They’re minerals. And we have enough of these critical metals.

“So, if the world is turning its attention away from fossil fuels and of course with global warming moving towards green energy, that means the time for Nigeria’s rebirth, what I call Nigeria’s rebirth, has come.” He added: “With all due respect, the concept of ‘reduced revenues’ derived from the solid minerals sector does not reflect the actual fact…

“This is far from the revenue reality as reported by several credible research organizations, including the Nigerian Bureau of Statistics, over the past five years.

“Having the above facts in mind, I believe you will agree with our Ministry that the concept of diminishing returns is alien to the financial performance of the Solid Minerals Sector, especially over the last five years.

“The problem is therefore not that incomes are falling, but that these rising incomes are still too low compared to the economic potential of the solid minerals sector and the level of economic activity in this sector.

“We agree with the conclusion of NEITI and other stakeholders that while the sector contributed 0.63% of GDP in 2021, from 0.45% in 2020 and 0.26% in 2019, “the sector did not has yet to achieve its full potential to make a significant impact on the overall Nigerian economy.”

“At present, the reality of the solid minerals sector and its contribution to the national economy is seriously under-researched and under-reported. This is one of the reasons why the Ministry established cooperation with BBS in order to improve the quality of research and, consequently, the reliability of data.

“For our part as a regulator, we are increasing our data collection capacity, technological sophistication and system visibility.

“Three weeks ago, I issued a directive on monthly data returns, in line with our policy of disseminating monthly mining statistics to ensure that every Nigerian has access to data on facts and figures on the progress we are making in transforming the sector.

“We will soon deploy advanced satellite technology that will use geospatial tools to record every mining activity on Nigerian soil.
“We also imposed penalties for truancy in the industry, revoking 1,663 licenses of operators who violated the law regarding the payment of an annual service fee and 924 inactive licenses. While fines for restitution have been imposed in response to public calls, the message is that enforcement will henceforth be the rule, not the exception.”