FG Targets 7% Growth in Mining Contribution to GDP

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    Shola Oyeyipo and Segun James

    Despite huge its potential, Nigeria has dropped among leading mining countries, the Minister of Mines and Steel Development, Dr. Kayode Fayemi, has said.

    Fayemi reassured the rest of the world, particularly major international players in the mining sector that Nigeria is ready to collaborate with all stakeholders to ensure that the sector contributes to the growth and development in the country.

    The minister, who appeared on ARISE News, a THISDAY Newspaper sister broadcast station on Tuesday, said the country is already taking some important steps in reversing the downward trend in the sector to open it up to investors and attain about seven per cent contribution to Gross Domestic Product (GDP).

    “At a time in Nigeria, power was only generated by the three mining companies. The railway that moved from Enugu to Port Harcourt was largely to service the coal industry and these are things we filtered, but Nigeria is still largely a greenfield as far as mining is concerned. That is why the opportunities are legion if we focus our energy on geological prospectivism; on organising the informal sector in mining; on putting enough access to finance in the hands of those embarking in the sector and generally ensuring that the business environment is conducive.

    “The roadmap is out. It has been approved by the Federal Executive Council (FEC) and the thrust of the roadmap is that government is going to be an enabler; we are not going to be an operator. We are going to provide a conducive environment for players to come into the industry and we will support them with a variety of incentives; tax breaks, predictable legal and regulatory environments, access to finance, access to tools for the small scale players and a clearly defined licensing regimes. These are the things we should be able to do while we allow the payers in the sector to drive the industry,” he said.

    Though not shying away from the fact that the sector is yet to attain its pride of place in terms of its contribution to the GDP, Fayemi expressed great optimism that barring an unforeseen circumstances, the sector would soon begin to contribute significantly to Nigeria’s income.

    “Though the current share of the mining sector is still abysmally low with 0.34 per cent of GDP, but what is interesting is that if you look at the last two quarters, it is mining and agriculture that are growing, clear direction in the offspring. With the emphasis at our disposal and all the facts that we have, by 2015 – about 15 years, we should be hitting seven per cent of GDP. We used to be five per cent. We believe we could be up to that if we provide the legal and regulatory environment,” he added.

    Noting that while mining might not be one of the immediate sources of alternative sources of income to Nigeria, Fayemi said considering the attitude of the President Muhammadu Buhari administration to the mining sector and the policy readjustments being carried out, it would not take much longer before the sector begins to earn foreign exchange for the country.

    “President Buhari has always been passionate about agriculture and mining, it is not a latter day fact for him, having worked in the oil sector himself as minister…if you look at our economic recovery and growth plan, we have said the trigger for inclusive growth is ensuring stability by aligning our trade policy with our monetary policy and with our fiscal policy. Two, increase expenditure in transportation infrastructure, road and self-sufficiency in energy and power sectors,” he added.