Experts identify minerals as bail out for Nigeria’s economy

With the growing effect of the Coronavirus on global economy, the need for countries to strategically re plan their economic blueprint have taken a center stage as experts are already going back to the drawing board. AYONI M. AGBABIAKA reports.

Covid-19 pandemic and economic lockdown

Experts in the mining sector have set agenda for the industry in post-Covid era in Nigeria. This is coming as the Covid-19 pandemic and economic lockdown pose economic threat to world economies including Nigeria.

In view of the current reality, the Mineral Sector Support for Economic Diversification (MinDiver) Project, under the Ministry of Mines and Steel Development, held a crucial session on Day 3 of the Virtual Mid-Term Review (MTR) of the project to look at the role of mining sector in minimising the impact of Covid-19 and global oil crisis.

The event was part of a six-day mid-term review schedule planned for an overarching strategy for executing current and planned activities to achieve the project development objectives of MinDiver, the ministry and the mining sector.

Identifying strategic minerals

Experts believe identifying strategic minerals in line with the current dynamics of market demands as to what minerals investors need to invest in relation to international and domestic demands of investors is crucial at this point of the country’s economic lethargy.

The overall objective of the MTR is to assess the progress of the MinDiver project with the World Bank, stakeholders of the ministry and other key actors, as well as look at new ways of integrating mining into the mainstream economy to build Nigeria’s resilience to shocks.

Experts explored minerals

Industry experts explored minerals like cobalt, lithium, gemstone, battery minerals and jewelries as future minerals the country could focus on to aid economic recovery given the decline in the extractive industry.

“There is also barite as one of the minerals that will be useful in the oil industry; phosphate for the fertilizer industry and limestone for manufacturing of cement for the construction industry,” MINDIVER media officer, Ishaku Kigbu said in a statement made available to Blueprint.

Habeeb Jaiyeola of Price Waterhouse Cooper, PwC; in his presentation stated that with the stark reality of Nigerian economy facing recession due to the lockdown, the nation must begin to prepare post Covid -19.

He said as a mono economy dependent on oil, which unfortunately has gone down without assurance of going up, and attendant limited markets for exports due to fall in global demand, Nigerian government must begin to see the mining sector as essential.

Nigeria should leverage on current challenges

According to him, Nigeria should leverage on current challenges, seek solutions and revamp the mining industry through targeted activities.

Jaiyeola stated that the ministry needs to strategise effectively to begin to block loopholes within the government in the areas of revenue and payment of royalties.

He said mining companies will have to pay the right royalties and taxes and ensure they go directly into government coffers.

“Provide accurate royalty data, collaborate with key ministries and relevant agencies to ensure that government is not short-changed. Also, to ensure correct financial reporting to align with the mining council, look at issues related to multiple levies which discourages miners from paying correct levies to government treasury and support/strengthen artisanal miners.

Others, he said, include “focus on downstream and not just on extraction, intensify local efforts on minerals that are strong and can drive the economy as well as focus on local processing like the growing jewelry industry,” he said.

Task Team Leader on the MinDiver Project at the World Bank in Washington, Mr Mike Stanley said Nigeria should not wait for oil prices to rebound because it may not and once it does there will be over supply from countries like Saudi Arabia.

Oil has been showing this declining signal since 2014

 He said oil has been showing this declining signal since 2014. For him, Nigeria should begin to think of developing iron ore minerals, limestone for water carbonates, lithium, cobalt and generally thinking out of the box to attract investment.

He said Nigeria should begin to think of a need to develop a one stop shop and understand what investors need and want as well as focus on value added processing which will in turn create jobs without being moved out of the country in this Covid period.

The team leader also believes there is need to deepen development through the iron ore and steel deposits on the Central Economic Corridor.              

To Professor Bolaji Hassan of Nigerian Institute of Mining and Geosciences Jos, it will be difficult to develop the mining industry without the development of the steel sector in post Covid -19 period.

 He noted that the development of Itakpe Iron Ore has become very necessary in view of the present realities, stating that the ministry should engage the National Steel Resources Development Agency to come in and develop the iron ore.

Resuscitating the Ajaokuta Steel Company

Hassan was of the opinion that given the economic situation, resuscitating the Ajaokuta Steel Company by the federal government is a step in the right direction, but government must realise that Ajaokuta cannot develop without iron ore and steel of which Nigeria has in Itakpe and the Agbaja Cast Steel in Kogi State. 

He said in spite of the happenings in the oil industry, barite will still be useful in the drilling of crude oil and should be categorised as a mineral for the future.       

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