The Verdict according to Olusegun Adeniyi. Email, email@example.com.
With over 27 billion oil equivalent of bitumen, 2.7 trillion tons of limestone, about three billion tons of Iron-ore and 1.4 billion tons of Coal, Nigeria is one of the richest in solid minerals in the world. But most of the 40 minerals (spread across 500 locations), have remained largely untapped with artisanal and small scale mining accounting for about 90 percent of solid mineral productions. This is essentially due to years of neglect of the sector following the discovery of crude oil.
It is then little wonder that when the South African Police recently opened fire during clashes with striking workers at the Marikana Platinum Mine, leaving no fewer than 34 workers dead, the massacre did not attract as much attention in Nigeria. Yet the South African tragedy is closer home than we actually imagine, given the socio-economic issues involved. Just recently, the humanitarian aid group, Doctors without Borders, lamented that lead poisoning has in the last two years claimed the lives of over 400 children in Zamfara State; with about 2000 others at great risk. The children were poisoned by dust released by illegal gold miners in the course of breaking open rocks near their homes.
But our disposition to issues surrounding mining in our country is borne out of ignorance, since we have not come to terms with the huge potentials of the sector. If we do, most of the Northern Governors who are busy looking for illusory oil wells will appreciate that what Mother Nature has planted in their backyards are as precious as oil. I just hope we have learnt sufficient lessons from the mismanagement of our oil assets that will serve us well when we eventually develop the mining sector with all the promises and the perils.
It is instructive that Nigeria had been a key global player in the production of solid minerals as the world largest producer of columbite and sixth largest producer of tin, until the sector collapsed in the seventies. But, to the credit of former President Olusegun Obasanjo, he sought to address the rot in the sector when he came to power in 1999. The reform in the solid mineral sector which he helped to engender was aimed at enhancing poverty reduction, employment generation, wealth creation and import substitution. Then Solid Minerals Minister, Mrs Obiageli Ezekwesili, produced the first blueprint for the exploitation of 34 Nigerian solid metals and helped to lay the foundation in what has become a rather promising but highly troubled sector.
With the support of the World Bank, the federal government was able to put in place in year 2004 the Sustainable Management of Mineral Resources Project (SMMRP). Its main objectives were to: Increase government technical and institutional capacity; manage the solid mineral sector in a sustainable way; and create a basis for nonfarm rural renewal through the development of artisanal and small scale mining in selected areas of the country.
In recent years the federal government has, largely through the efforts of the SMMRP, made significant progress to put in place the necessary legal and institutional framework to make the sector attractive to global investors. Some of these measures include the enactment of the investment-friendly Mineral and Mining Act 2007, Mining Regulations 2011, Minerals and Mining Policy 2008 and the establishment of the Mining Cadastre Office, in keeping with global best practices.
As part of a larger research on how to diversify our economy, I came across some of the critical achievements that have been recorded in the mining sector in recent years. For instance, through the World Bank-assisted SMMRP, the federal government has made adequate provisions for reliable geosciences data for investors by strengthening the Nigeria Geological Agency. Nigeria is also among the few countries in the world to have a completed airborne geophysical coverage. Over 16,000 mining grants have been processed in the past two years and fifty foreign investors from the advanced mining jurisdictions of Australia, Canada and China are currently embarking on exploration activities around the country. From capacity building to the provision of technical assistance, most of the significant achievements in the sector in the past seven years is due to World Bank support. But there is need for a more sustainable source of funding, which ordinarily could come from the National Resources Fund that is now being deployed to serve questionable ends.
In the April 2012 “Roadmap for the Development of the Solid metals Sector” signed by President Goodluck Jonathan, he reiterated his commitment to “the diversification of our economy away from over-dependence on oil as the principal revenue source.” He also harped on the need to develop an industry-wide capacity building programmes for both small and medium scale mining companies, “with the aim of entrenching sustainability in the exploitation of all mineral resources.”
As lofty as those words were, they have to be matched by serious efforts for us to derive any serious benefits from our natural endowments in the solid metals sector, where we need to begin to put our acts together. The president forecasts that the sector will contribute “at least 5 percent to the nation’s GDP by 2015” while creating “about three million direct and indirect jobs”. While it is no crime to dream, such quantum leap (of 1250 percent) would take more than the current attention and level of funding by the federal government since the contribution of the sector to the GDP in year 2011 was a meagre 0.4 percent!
The critical challenge is that as we develop the sector, we must always remember our unedifying experience in the petroleum sector either with regards to the environment or with issues of transparency and accountability. Aside the fact that we do not as yet derive much value from current efforts with gemstones being smuggled outside the country by unscrupulous businessmen, the way and manner in which most of the resources are being exploited also expose many communities to danger; with mine dumps and mine ponds that now serve as harbingers of death. In fact, it has been an harvest of tragedies this year at many of the communities where unsafe mining and mineral processing activities are taking place.
While the relevant authorities should be alive to their responsibilities, the SMMRP office deserves all the assistance and attention it can get from the federal government and donor agencies so that it can continue to deliver on its mandate to the sector which we can only ignore at our peril.
Dame Ihedioha @ 80
I have known Dame Dorothy Nsonma Ihedioha as a mother for the better part of the more than two decades that her son, Emeka (currently House of Representatives’ Deputy Speaker), has been my friend. And this weekend at Mbutu, Aboh Mbaise local government area of Imo State, we are going to celebrate as she marks her 80thbirthday.I wish our dear Mama many more years in good health and prosperity. Ndigbo say “Nne bu nne”,meaning that a mother is always a mother worthy of respect and honour. In the case of Dame Ihedioha, we say “Nkea bu ne muru nne na nna”(this is a mother that has given birth to mothers and fathers of substance in their own right).
RIGHT OF REPLY
Wrong on CIL Payment
By Mike Jituboh
Your verdict of Thursday 13thSeptember on National Honours was as usual a thoughtful, balanced and well written article, with recommendations that deserve serious consideration by the government. However, much as I applaud the overall thrust and contents of your article, I feel compelled to draw your attention to a glaringly erroneous statement you made in respect of Communications Investment Limited (CIL)
On CIL you firstly rightly stated that “At the 2000 GSM licence auction, Adenuga’s company, Communications Investment Limited (CIL), had won the same frequency that Motophone had earlier been given and for which the Chagouris were then still in court”. But then you went on to wrongly assert that “Adenuga could not muster the requisite licence fee within the stipulated time of 14 days.”
As one who led the CIL team that bided for the license and then spent a few days in Paris working with Dr. Adenuga to successfully raise and pay the balance of the license fee of $265 million, before the deadline given by the Government, I consider it imperative to set the record straight; as given hereunder.
A day after winning one of the three GSM licenses, a CIL team led by Dr. Adenuga headed for Paris for negotiations with BNP Paribas. After several days of protracted negotiations, agreement was reached on the terms and conditions for a loan facility of $265 million for paying the balance of the GSM license. The deadline for making payment was 5pm of 9thFebruary 2001 and on that fateful day all was set for a transfer by swift instruction when word came in from our colleagues in Lagos that the frequency allocated to CIL was the same frequency that had been allocated to and being used by Motophone. The latter was in court to challenge the government’s withdrawal of the frequency.
Our team was suddenly confronted by a difficult situation that required a quick and decisive action. With its assigned frequency under litigation and the deadline for payment approaching, we had to decide whether or not to pay the huge sum of $265 million and hope that Motophone’s litigation would not end up ensnaring both the money and our ambitious plan, of establishing one of the biggest and best telecommunications network in the world. With no time left to resolve the matter with the government before making payment, we decided to make payment with the condition that the money should be released after the government gives CIL an indemnity to cover the possibility of Motophone winning its suit and retaining the litigious frequency. Consequently payment of $265 million was made by BNP Paribas before the deadline hour on 9thFebruary, 2001directly to the designated account at JP Morgan Chase, New York, along with the aforementioned condition.
As most Nigerians will recall, the government rejected the condition that was placed on the payment and cancelled the CIL license. The government refused all entreaties and the funds were ultimately returned to BNP Paribas. Eventually we won the bid for the Second National Carrier License and launched Glo mobile. Ironically the same erstwhile litigious frequency was given to Globacom along with the Indemnity that had been denied CIL!
--Mr Jituboh is Globacom Executive Director, Special Project