LCCI Decries Mining Sector’s Contribution to GDP, Seek NIOMCO, Ajaokuta Revival
The Lagos Chamber of Commerce and Industry (LCCI), has expressed concern about the abysmally low performance of the Nigerian solid mineral sector, which contributes less than 0.5 per cent of the country’s GDP.
The LCCI stated this in a statement titled, “LCCI Statement on the Declining Performance of Nigeria’s Solid Minerals Mining Sector.”
According to LCCI: “Despite Nigeria’s enormous mineral resources, the minerals sector is not a major engine of economic growth and receives little investment. The sector produces less than 0.5 per cent of GDP with limited value chain in the economy. Nigeria’s solid minerals are exported with little or no value added. While Nigeria intends to capitalise on the mining sector’s potential, it faces numerous challenges in mineral beneficiation and value addition.”
The chamber observed that the National Bureau of Statistics (NBS) recent reports showed that the Nigerian mining industry has recorded low performance in the last two quarters.
According to the NBS, the mining and quarrying sector’s productivity declined from 8.32 per cent in third quarter of 2022 to 4.47 per cent in the fourth quarter of 2023 despite its immense potentials.
It, therefore, urged, “the government to review the mining industry’s strategy to attract mineral exploration investments, reignite mining project development, accelerate new mineral discoveries, and encourage optimal utilisation of Nigerian mineral resources in line with the Environmental, Social, and Corporate Governance (ESG) principles for sustainable growth.
“Furthermore, we urge the government to address the sector’s funding issues and enable enhanced its access to finance for processing value-added minerals based products by establishing seed funds and special incentives to attract foreign and domestic investors.
“The government should seek innovative ways of revitalising the Ajaokuta Steel Company Limited (ASCL) and the Nigerian Iron Ore and Mining Company (NIOMCO). We have consistently advised that the model of the NLNG management can be adopted for this purpose.
“To ramp up investments in this sector, we need to deploy more relevant research and technology to trace more mineral deposits, and make more relevant data available to interested investors.”
The Director General of LCCI, Dr. Chinyere Almona, said many obstacles had hampered the mining sector, including inadequate infrastructure, regulatory inconsistencies, limited access to financing, and security concerns in mining locations.
Almona, said the challenges have collectively contributed to the sector’s stifling growth, deterring investments, and impeding the sector’s ability to fulfill its role as a catalyst for industrialisation in spite of the mining roadmap in 2016 and other measures taken to ensure that the sector would contribute 3.0 per cent to GDP by 2025.
The chamber observed that regulatory and legal challenges, including inconsistent policies, unclear land tenures, and issues between federal and state governments, particularly in the collection of royalties and taxes from licensed miners operating in their domains were undermining the performance of the sector.
She said the government should learn from the hindrances presently experienced in the Niger Delta for the failure to allow small scale crude refineries to operate under set supervision and standards and “adopt an inclusive a strategy on Artisanal and Small-Scale Mining (ASM) aligned with development plans at all levels of government and linked to other national rural sector strategies.
“This will make the solid minerals sector more integrated with other activities that generate more jobs in rural areas. We need to support the mining ecosystem with amenities like electricity, good roads, and water. Mining companies should be engaged to sign Community Development MOUs with the host communities that will help to create a sustainable operating environment.”
“The LCCI believed that these proposed measures could revitalise Nigeria’s mining sector and position it as a critical driver of economic growth and development if they are effectively implemented.
“Their successful execution requires concerted efforts and collaboration among government agencies, private sector entities, civil society organisations, and local communities. As stakeholders committed to advancing Nigeria’s mining industry, we stand ready to collaborate with all relevant stakeholders to overcome the existing challenges and unleash the sector’s latent potential for its contribution to our nation’s development,” she said.