29 September 2016, Abuja – The Federal Government on Wednesday announced plans to boost earnings from mining sector with a view to increasing its GDP contribution from 0.33 per cent to seven per cent over the next 15 years.
The Minister of Mines and Steel Development, Dr Kayode Fayemi, announced this at the National Council on Finance and Economic Development Conference in Abeokuta.
The minister said it had become imperative for Nigeria to diversify its revenue sources in the light of the prevailing decline in the global price of crude oil.
Fayemi expressed regrets that in spite of the huge mineral resources in the country, the mining sector had remained underdeveloped with a contribution level of 0.33 per cent to the GDP in 2015
He said, “The 0.33 per cent is a reversal from historically higher but still poor percentage levels of between four and five per cent in the 1960s to 1970s
“Our policy goal, however, is to return to a contribution level of five to seven per cent in the next 10 to 15 years.”
He recalled that Nigeria could boast of a very rich mining history as far back as 1902 that was once globally renowned.
He said, “Up till 1960, Jos was the sixth largest producer of tin in the world while the eastern city of Enugu became known as coal city due to robust mining activities introduced under the British rule.”
He listed the most promising mineral resources as gold, iron ore, barite, bitumen, tin, zinc, coal and limestone.
Fayemi identified major challenges which had confronted the mining sector as poor policy choices, inadequate data required by investors and insufficient financing and fiscal incentives.
Others according to him, are infrastructure deficit and poor partnership with critical stakeholders.
He said that the Federal Government had marshalled plans to reposition the sector, to unlock its potentials.
Fayemi disclosed that plans were underway to establish the Nigeria Solid Minerals Investment Fund in partnership with the private sector to enhance the financing of mining projects.
The minister also announced a 13 per cent derivation sharing from mining revenue to states as part of efforts to promote “co-operative federalism”.
“Our goal is to provide a better deal for the local communities where these minerals are located to ensure communal buy-in and benefits,” he said.
Fayemi also announced plans to rebuild key institutions like the mining school in Jos to become fit for purpose and train the next generation of mining specialists, innovators and entrepreneurs.