Miners demand diversification of revenue base, reform of downstream sector

Oscarline Onwuemenyi
19 March 2016, Sweetcrude, Abuja – The Nigerian Mining and Geosciences Society (NMGS) has urged the Federal government to quickly reform the downstream sector of the oil industry by ensuring increased local refining of products, as well as improvement in laws to monitor and ensure efficiency of retail petroleum outlets across the country.

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The President of NMGS, Prof. Olugbenga Okunowo explained that the Society is the umbrella professional body of all geoscientists and mining engineers in the Nigeria in the oil and gas, solid minerals, water and metallurgical sectors of the nation’s economy.

He said, “As a professional body, our members are involved in the exploration, exploitation and management of environmental and natural resources of the nation. This task makes our members responsible for the production of about 90 percent of the revenue of the country.”

Meanwhile, in a communique drawn up at the end of a pre-conference panel discussion comprising experts in the solid minerals, oil and gas, water and environment, a copy of which was obtained by our correspondent in Abuja, the members noted the low level of diversification of the oil and gas sector with attendant challenges in the downstream sector and the abysmally low refining capacity.

The Society also noted “the current effort of the government to transform the Nigerian oil and gas industry for efficiency and sustainable growth through market reforms, diversification of the revenue base, monetization of the vast natural resources including exploration and production operations.”

It therefore recommended that the government “should ensure that the reforms embarked upon lead to the maximization and utilization of oil and gas resources locally which should involve the enhancement of the productivity of local refineries.

“Government should also put in place adequate laws to monitor the efficiency of retail outlets,” the communique added.

It noted as commendable the effort of government at revamping the solid minerals sector and the demonstration of political will in that direction, adding that government should “prioritize some ores for quick intervention, so as to facilitate their exploration and exploitation to pilot project stage. This will serve as encouraging examples to hesitant private sector investors.”

The group lamented the low level of value addition capacity for minerals exploitable from Nigeria, even as it stressed the need to intensify exploration activities for solid minerals, acquisition of relevant data and reserve evaluation to attract foreign mining juniors and major to the country.

It stated, “The solid minerals sector as it is today is in need of adequate funding support from the government. Currently, artisanal miners who lack the know-how and finance dominate mining activities in the country. This is responsible for the poor output of the solid minerals industry in Nigeria.”

It added that underfunding of the solid minerals sector has resulted in the inability of relevant government agencies to undertake data gathering, analysis and processing in addition to the lack of infrastructure for exploration and exploitation.

“Government should give special incentives to banks to encourage them to give loans to small scale miners that will help them in expanding their operations and modernize with latest technology. Furthermore, to enhance productivity, avenues should be created that will give artisanal miners appropriate training to enhance value addition,” the communique stated.

It further called on the government to establish state-of-the-art and internationally certified laboratories where reliable mineral and rock-related data can be obtained.

It also noted that the water resources potential of Nigeria is sufficient to meet the current and future demand for various purposes, but will require efficient and effective planning, development and sustainable management.

“Nigeria has weak institutional framework with overlapping functions, unclear mandates, bogus workforce and inadequate water infrastructure to address the growing need forwater in the country. Population increase and urbanization are impacting negatively on water quality and also fast outpacing the rate of infrastructural development in the water sector.

“Government should prioritise the development of water resources infrastructure to ensure adequate spread that would meet the present and future need of Nigerians. It should put in place mechanisms to review the existing water laws so as to avoid overlaps and remove obsolete and redundant laws,” it added.

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