President of the Senate, Ahmad Lawan, has said Nigeria has a lot more to do if the country must succeed in diversifying its economy by ensuring the development of the solid minerals sector.
Lawan made this known on Tuesday in his concluding remark after a bill seeking to establish the Nigerian Minerals Development Corporation scaled second reading on the floor.
According to the Senate President, the exploration of solid minerals, besides being an avenue to diversify the country’s dependence on oil, remains a sure way for Nigeria to improve on its Foreign Exchange earnings and Gross Domestic Product (GDP) figures.
He said: “It is imperative that the Nigerian economy is diversified, and the solid minerals, definitely, is one avenue through which we can earn the much needed foreign exchange.
“I also believe that we have a long way to go, we haven’t done enough. At the moment, there are very little investments into this sector and the contribution of the sector to our Gross Domestic Product (GDP) is just about 0.3 percent, even though we are so blessed and endowed with so much solid minerals all over the country.
“This corporation (NMDC) when created will definitely work to ensure that we promote the exploration and exploitation of our solid minerals endowments.”
Earlier, sponsor of the Nigerian Mineral Development Corporation Bill 2021, Senator Umaru Tanko Al-Makura (APC, Nasarawa South) said the intendment of the bill was to strategically diversify Nigeria’s economy from being a mono-product economy to the productive development of various sectors of economy.
According to the lawmaker, “next to agriculture, the solid mineral sector has been identified as one with the potential to compete and eventually replace crude oil as a major source of foreign exchange earnings.”
He added: “the Economy Recovery and Growth Plan (ERGP) created focus labs made up of professionals from the mining sector to create intervention programmes to de-risk the solid mineral sector and increase revenue for all stakeholders, making the sector more attractive to both local and foreign investors.
“Nigeria is blessed with an abundance of solid minerals in five distinct classes; precious mineral/ gemstones (ruby, emerald etc), metallic ores (lead, zinc, copper etc), construction minerals (laterite, granite, gravel, sand etc) and energy minerals (bitumen, coal and uranium among others).
“All these resource remains largely untapped and unexplored. However, NMDC seeks to develop upstream exploration and production, midstream mineral processing and metallurgy and downstream logistics, trade and export which will catalyze investment in the entire mining value chain in Nigeria.”
Al-Makura noted that the establishment of the NMDC would urgently address the challenges of Internally Generated Revenue (IGR) currently facing State Governments in Nigeria, stressing, “it would provide the much needed revenue to deliver on the administration’s priority areas of infrastructure development; social inclusion and poverty reduction, industrialization and job creation for the citizens of Nigeria.”
He added that, “upon establishment of the corporation, initial funding shall be by way of a sovereign guarantee covering the sum of N5,000,000,000.00 (Five billion Naira only) for a successful take off of the operation including all initial capital and operating expenditure.
“The Federal Government of Nigeria would pay up its 70 percent equity contribution and the institutional investor shall pay their respective equity participation to the corporation.
“Subsequent funding of the NMDC would be through the Nigerian Mineral Development Fund (NMDF) which will be managed by the corporation strictly in accordance with international best practices.
“The NMDC is proposed to be a state-owned Enterprise (SOB) with private sector participation and governance control as the vehicle for unbundling upstream and downstream commercial activity in the Nigerian Solid Mineral sector.”
Al-Makura identified the activities and scope of the corporation to include: Mineral exploration activity for solid minerals located within Nigeria; Investment in mineral processing and metallurgical technology for import substitution and export as a direct source of revenue to the Government; Creation (Management) of the Nigerian Mineral Development Fund (NMDF); Creation of an active solid mineral exchange and all associated key enablers; and Ensure technology transfer and local content development in the Nigerian Solid Mineral Sector.
He disclosed that the strategy for the successful creation of value in the solid mineral sector by the NMDC is hinged on its partnership with Government through the Ministry of Mines and Steel Development (MMSD) and the private sector to implement a ”Mines to Market” master plan covering upstream, midstream and downstream activity.
“The strategy includes the commercial and administrative segments. The commercial segment will focus on acquiring selected licenses for the seven priority minerals (Gold, Lead/Zinc, Iron Ore, Baryte, Limestone, Bitumen and Coal) through partnership agreements with State and Local Governments while sharing revenue With them in pre-agreed ratios,” the lawmaker said.
Contributing to the debate, Senator Binos Dauda Yaroe (PDP, Adamawa South), while speaking in support of the bill, said it would promote and support the development of the solid minerals sector, which, according to him, “would diversify the economy and lead to less reliance on the petroleum sector” amidst creating jobs.
Senator Akwashiki Godiya (APC, Nasarawa North) said the bill, if passed and signed into law, would promote private sector participation in mineral exploration activities; encourage investment in minerals processing; facilitate creation of the mineral development fund; and support technology transfer.
On his part, Senator Abdullahi Adamu (APC, Nasarawa West) said the establishment of the Nigerian Solid Mineral Development Corporation would go a long way towards maximizing efforts on the existence of solid minerals across the country.
“Every part of the country has a bit of preponderance of one kind of resource or the other for the development of our economy.
“In the South-South, there’s preponderance of oil and gas; in the North-Central zone area, there’s a preponderance of solid minerals, but in the North-West also, you’ll find a lot of solid mineral deposits.
“So, if we get this corporation to come into being, it will go a long way in the effort to diversify our economy.
“It is obvious that when we open this sector, the amount of employment opportunity that will come from this is unlimited; and that is one of the major problems of this country today,” Adamu said.
Senator Cleopas Moses (PDP, Bayelsa Central), said, “there are teeming youths of this country whose number one challenge is employment, and, I believe that this is and avenue by which very great employment potential shall be discovered and it shall move our nation forward.
“Mr. President, you know that most of the security challenges we are having that has to do with most of out youths getting involved is as a result of serious unemployment issues in this country.
“And knowing the position of this senate is to see that such issues are corrected.”
Senator Ike Ekweremadu (PDP, Enugu West) picked holes in the bill and called for compulsory interrogation when forwarded to the relevant Committee for further legislative work.
He observed: “Mr. President, if you look at the title of this bill, it is for the establishment of the Nigerian Minerals Development Corporation.
“Mr. President, if you talk about minerals under our constitution and under our laws, you’re looking at solid minerals and also, Oil and Gas.
“So, if this second reading succeeds and it goes to the Committee, I expect that the committee needs to interrogate this to be sure that we are not doing something that is conflicting.
“Because already we have the Department of Petroleum Resources (DPR) that is regulating Oil and Gas, and that has to be established fully.
“But if it’s for both, then the bill has to say so, and then we have to also interrogate it against the provisions of the law establishing DPR.”
Citing Item 39 part 1 of the Second Schedule to the 1999 Constitution (as amended), Ekweremadu, further faulted the ability of the bill to shore the internally generated revenue of state governments.
“The problem here, Mr. President, is that minerals – both solid and oil and gas – are the exclusive preserve of the Federal Government, so I’m not sure how this will help the state governments in internally generated revenue,” he observed.
Another lawmaker, Senator Bala Ibn Na’Allah (APC, Kebbi South) called on the upper chamber to accommodate clauses in the bill that would protect the local content of the solid minerals sector against unhealthy competition by foreign companies.
“It is important to state the fact that It is not enough to make provision for enhancing the production of these minerals, the Senate must equally go a little bit further in making provision for protecting the local contents of these minerals against international unhealthy competition,” he said.
The bill after it was exhaustively debated, was referred by the Senate President, Ahmad Lawan, to the Committee on Solid Minerals.
The Committee is expected to report back within four (4) weeks.