The Federal Government said it is working to activate the full potential of the mining sector to improve the diversification of the economy.
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, stated this during the presentation of a gold coin to her by the Lagos Futures and Commodities Exchange (LCFE) in Abuja.
Ahmed expressed the government’s commitment to continue to improve the diversification of the economy by steadily growing other sectors, particularly the commodities trading ecosystem.
Activating potentials of the mining sector: She described the presentation as one of the results of the Federal Government’s commitment to continuing to improve efforts at diversifying the economy. She said:
- “This is very pleasing for me because we have been trying to improve the diversification of the Nigerian economy. People say we need to diversify the economy, but the Nigerian economy is truly diversified. Our GDP today has a 6.4% contribution from the oil and gas sector, so 94.6% of the Nigerian economy is from other sectors. One of the sectors that we have been trying to activate its full potential is the mining sector.
- “The mining sector today is still very small, but that is on the side of the government. But in the private sector and now I am glad in the states, there are very active mining activities that are taking place. Unfortunately, until now, we have not been getting the full value of the mining activities. Mining activities have been largely artisanal, there are a lot of participants that take out our minerals without reporting it, without government or even the miners getting full value for it.”
The Minister stated that in a bid to get the full value of mining activities in the country, the President approved and set up the Presidential Gold Mining Scheme with the Solid Minerals Development Agency leading.
- “They had set up a pilot that started from Kebbi State where they supported the artisanal miners to be able to practise better mining practices and also to off-take the minerals that they mine, and do some first-level refining. Then the Central Bank offtakes this and sends it out of the country for proper mining.
- “The essence for us is to begin to hold our reserves in minerals like gold so that our reserves are not all in US dollars. We know what happens to US dollars and what can happen to them. We are beginning to have our reserves in gold”.
Petrol refineries: She disclosed that the scheme, even though it was started by the Federal Government, has seen refineries beginning to work in Nigeria adding that there is one in Ilesha, Segilola which was the first refinery that was licensed in Nigeria.
- “This gold is now being mined in Nigeria, refined in Nigeria up to the point of producing billions and then off-taken by the CBN and other organisations like the LCFE. They are also coming forward to facilitate the trading of gold in the commodities exchange in Nigeria. That’s what we want, we wanted to be able to activate the full circle. What was missing was the off taking, now the off-take is being addressed and this will help to drive demand.
- “Once there is demand in the market end, the producers will be encouraged to produce more, there will be more employment, and we will begin to see more banks supporting this mining sector. Before now the banks were not too interested in supporting the mining sector because of the long gestation period. The investment is worthwhile and we will encourage these businesses to grow and produce more. I want to congratulate the LFCE for being the first of its kind in Nigeria to achieve this”.
National Assembly: The Managing Director of LCFE, Mr Akin Akeredolu-Ale stated that Nigeria is a commodities country, but has a large potential that is untapped so far and solicited the support of the National Assembly in passing the Investments and Securities Bill which he said will bring about massive development in the sector.
- “I thank the SEC for pushing the Investments and Securities Bill because that is the legal and regulatory framework that is supposed to support the capital market and by extension the commodities trading ecosystem.
- “We are hoping that the bill is approved so that we are able to have a hold on the commodities space and the revenues that are slipping out of Nigeria. We need that bill passed to be able to function more effectively” he added.
