The World Bank and the Nigerian Export-Import Bank, NEXIM Bank, say they are committed to providing a structured intervention to revamp and deepen Nigeria’s mining sector.
World Bank Senior Mining Specialist and Head, Energy & Extractives Unit, Francisco Igualada, along with Linus Utsu of Mining Investments Consult, met with the Managing Director of NEXIM, Roberts Orya, in Abuja to share ideas on how to move the sector forward.
During the meeting, Mr. Orya informed the team of the work of NEXIM, set up to assist government in diversifying the Nigerian economy away from the oil.
Mr. Orya said the bank has been doing this through the provision of export credit facility; risk bearing facilities; trade and market information, and export advisory services to export-oriented investors in the manufacturing, agro-processing, solid minerals and services sectors.
On solid minerals extraction, the NEXIM boss noted Nigeria’s endowment with huge solid mineral deposits, pointing out that about 34 products have been identified in commercial quantities in different parts of Nigeria.
Since the country’s independence, he said the failure to put in place a structure to help exploit available natural resources has been the bane of national development.
The low activity in the solid mineral sector, in particular, he stated, had resulted in the sector not yielding the desired financial revenues, as records of payment of taxes and royalty to the government have been scanty.
“Nigeria is losing lots of resources from untapped mineral deposit as well as from the little being mined mostly by illegal miners who smuggle the products out of the country,” he said.
Despite its huge potentials, Mr. Orya said the sector was still grossly underdeveloped and dominated by small and medium enterprises/artisanal and informal miners using crude machinery and equipment.
He identified other challenges to include poor access to long term funding due to the capital intensive nature of the industry; lack of accredited laboratory for testing and poor infrastructure – roads, rail facilities – to move the products.
Regardless, the NEXIM chief said since its inception, the bank has provided interventions to the sector to the tune of N7.17 billion to create more than 4,302 direct and indirect jobs, in addition to facilitating foreign exchange flow inflow of $80,142 annually.
He described as abnormal a situation where the country’s earnings from the solid mineral sector are so low, compared to South Africa where the mining industry remains a cornerstone of the economy.
“Nigeria should make solid minerals exploitation the mainstay of the economy,” he said. “Solid mineral sector is making significant contributions to economic activities in South Africa. It accounts for about 18 percent of GDP; one million jobs, and 50 percent of all foreign exchange earnings.
The critical issues, he explained, ranged from how government and other players properly structure the mining sector, increase funding, and attract needed investment capital; infrastructural development for the industry.
Responding, the World Bank specialist, Mr. Igualada, said his knowledge of the mining industry has revealed that the sector was fraught with risks and uniquely capital intensive.
Wondering why Nigeria, with all its huge potentials, had continued to earn less than Ghana, Mali and Burkina Faso from mining activities, Mr. Igualada blamed it on the continued focus on oil and gas by successive governments to the detriment of the mining sector as enabler for manufacturing, services and other sectors.
With the decline in world oil prices in recent times, he said Nigeria was losing huge opportunities of job creation, revenue earnings and the development of other support services in the value chain that could have boosted the economy by refusing to develop the mining sector.
“There is need for a structured consolidation of efforts towards developing the sector. This should focus on building the right capacity at human and institutional levels as well as establishing and enforcing the requisite legal and policy frameworks,” he said.
The World Bank has a Public-Private Partnership arrangement that could be recommended for the development of the solid minerals sector in Nigeria, stressing the need to link interventions to develop the sector through the Solid Minerals Fund and renewed government involvement.
On his part, Mr. Adie said considering the huge potentials in the Nigerian mining sector, he was not satisfied with the level of interest by the World Bank, stressing the need to seize the prevailing opportunity to develop the sector.
He cited the interventions of World Bank in the Sri Lankan gemstone industry; the collaborations with EXIM Bank in India, among others, through MIGA and IFC, urging Nigeria to accord same priority to the sector through the multi- sectorial approach by NEXIM Bank.
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