TEXT OF SPEECH AT 2017 END OF YEAR MINISTERIAL BRIEFING

Protocols and Introduction

 

  1. Distinguished ladies and gentlemen, I, together with my colleague, Hon. Abubakar Bawa-Bwari, Minister of State, welcome you to today’s media briefing, which is for the purpose of giving accounts of our stewardship over the past 12 months, and sharing highlights of our plans and projections for the Nigerian Mining sector in the year 2018, within the context of our long term vision.
  2. As you all know, this type of engagement is not new to this ministry. We realise that in order to sustain the support of all stakeholders towards achieving our objectives, there is the need to provide periodic feedback on our work, and be as inclusive as possible in the governance of the sector. We therefore highly esteem the ethos of consultation, inclusion and broad-based participation of all stakeholders, and we have established a consistent pattern of engaging and listening to stakeholders, to secure their input into policy formulation and implementation in the sector.

Review of 2017

  1. The year 2017 has been very eventful. Our exertions were centered on advancing the reforms begun in 2016, in line with President Muhammadu Buhari’s mandate to us to reposition the mining sector as a frontier of this administration’s economic diversification agenda. Aligned with the ‘Roadmap for the Growth and Development of the Nigerian Mining Industry’ approved in August 2016, our aspiration remains to “build a world class minerals and mining ecosystem designed to serve a targeted domestic and export market for our minerals and ores”. Our focus remains to improve the sector’s contribution to GDP, and to create jobs and economic opportunities for Nigerians.
  2. Accordingly, 2017 saw the commencement of the full implementation of the Roadmap. It is important to note that our work in the mining sector is very much in sync with the policies and programmes of this administration’s Economic Management Team. The sector features very prominently in the Economic Recovery and Growth Plan which is the medium term plan for 2017 – 2020, and is the primary planning framework for the economy, with a vision of achieving “sustained inclusive growth aimed at increasing national productivity and achieving sustainable diversification of production, to significantly grow the economy and achieve maximum welfare for the citizens, beginning with food and energy security.”
  3. We are pleased that the mining sector is one of the key beneficiaries of the gains of the macro-economic reforms championed by the Economic Management Team; the Presidential Enabling Business Environment Council (PEBEC) and Inter-Ministerial Council; and other such entities. We excitedly welcomed the news that Nigeria moved up an unprecedented 24 steps in the World Bank’s Ease-of-Doing-Business ranking, and was adjudged one of the 10 top reforming economies. Reforms in the sector and efforts to make the Nigerian jurisdiction more attractive to investors impacted on Nigeria’s ranking in perception indices in the ‘World Risk Report’, published by the Mining Journal, which indicates that Nigeria has made remarkable improvements in both hard risk and perceived risk factors. The Nigerian Mining Jurisdiction is now considered to have a better investment risk profile than several other leading jurisdictions, and among the best in Africa.
  4. Consistently in 2017, the Mining sector featured in the story of our journey to economic recovery and consolidation. For example, in reporting the GDP figures for second quarter 2017, the Nigerian Bureau of Statistics indicated that the economy grew by 0.55%, largely attributed to improved performance of not only the Oil and Gas sector, but other economic activities like mining. The Mining sector grew by 2.24% in that quarter.

Consolidating on our feat of achieving a 300% increase in revenue (royalties and fees) between 2015 and 2016, we steadily progressed in 2017, and as at November of this year, the sector had already surpassed the entire revenue of about N2Billion generated for the whole of 2016, with over N3.5 Billion naira contributed to the federation account so far.

  1. While we still have a long way to go, with the gains we have collectively achieved in 2017, we can confidently say that we are well ‘On the Road to Shared Mining Prosperity’ in Nigeria. Some of our key achievements in 2017 are as follows:
    • Improved Sector Governance

The institutional capacities of the ministry and its agencies have been strengthened to effectively regulate the sector, with a particular focus on mines safety and security, and tackling the menace of illegal mining. The law providing for the establishment of the Mining Police has been operationalised with the robust support of the Nigeria Police Force. A new partnership has also been forged with the Ministry of Interior and other security agencies in this regard. I must at this point express our gratitude to the Honourable Minister of Interior, the National Security Adviser, the Director General State Security Services, the Inspector General of Police, the Comptroller General of the Civil Defense Corps, and other collaborating security agencies, for supporting us in our efforts to move decisively against vested interests in the mining sector, who had hitherto undermined our sovereign interests with illegal mining activities with such impunity.

 

We have equally made significant investments in training, tools and logistics in order to facilitate the effective discharge of mines inspectorate services, and other regulatory duties of the technical departments of the Ministry.

 

Towards achieving best practice in mineral sector governance, we conceived the need for a centralized GIS Web portal with supporting ICT Infrastructure and the automation of ministry services; all backed up by requisite policy framework and human capital development for sustainability. The overall objective of the project was to increase provision of reliable information and knowledge to enhance promotion of investment in the sector using technology driven innovation. We are pleased to report that in the course of the year, we launched a World Class web portal that meets the aforestated objectives. Deliverables of this project amongst others include: Business Processes Re-engineering, GIS Web Portal with a Business Automation System, Content Management System (CMS), Geographic Information System (GIS), Decision Support System, collaboration and upgrade of the ICT Infrastructure of the Ministry.

 

Significant improvement was also recorded in the Mining Cadastre office’s administration of mineral titles; with the agency now consistently issuing licenses to applicants within 30-45 days as stipulated in the Mining act, provided the applicant has fulfilled all statutory requirements. Our strict enforcement of the ‘use or lose’ clause in the mining law has led to the compliance of defaulting mining companies who are now putting their licenses to productive use leading to increased economic activities. More companies are now ensuring they pay their royalties and taxes as and when due, thereby increasing our revenue base.

 

Investment Promotion and Mineral Trade Department (Ipmt)

 

To properly harness this thriving sector, the MMSD has established a new department to monitor and control the local mineral trade chain comprising purchasing, sales and export. In its short span, the department has been able to put forth a roadmap for the development of a sustainable framework for mineral trade and export ecosystem. Working in collaboration with the MinDiver project office, the Nigerian Export Supervision Scheme (NESS), Nigerian Export Promotion Council (NEPC), Nigerian Customs Service (NCS), the Presidential Enabling Business Environment Council (PEBEC) and the Federal Ministry of Finance (Home Finance department), new mineral export guidelines and procedures have been developed as immediate remedial measures to curb revenue leakages from mineral exports. The guidelines shall come into effect in the first quarter of 2018. It is worthy of note that this is the first ever comprehensive guideline for mineral exports.

 

In view of the urgent need for Nigeria to evolve an integrated and sustainable framework for mineral exports, a consultant has been commissioned to develop a comprehensive policy framework for a dynamic mineral trade and export ecosystem. The key component of the concept is that it shall be administered under PPP arrangements to ensure adequate funding, professionalism, international best practice, sustainability and adequate Government oversight.

 

  • Increased Participation of Enablers

In 2017, we had unprecedented support from key enablers and stakeholders in the sector towards the advancement of our mandate. Worthy of note is the support the ministry secured through the Federal Government from the World Bank for $150mn for the Mineral Sector Support for Economic Diversification (MSSED or MinDiver) program. A critical component of the MinDiver project is to provide technical assistance for the restructuring and operationalisation of the Mining Investment Fund, which would make finance available to ASM operators through development finance, micro-finance and leasing institutions. The fund will also help to bring back on stream previously abandoned proven mining projects like tin ore, iron ore, coal, gold and lead-zinc.

Also in the course of the year, we advanced the provisions of the MoUs we have with several governments including China, Australia, South Africa, e.t.c., most of which cover arrears of collaboration such as capacity building and knowledge transfer, as well as geological prospectivity.

  • Improved Sector Funding

In 2017, a new board for the Nigerian Solid Minerals Development Fund was inaugurated, and a competent management in place. In collaboration with the Bank of Industry (BOI), the SMDF has launched a N5Billion fund to provide single digit interest loans to mining projects in Nigeria. Also, we have partially accessed the N30 Billion approved for the sector from the Natural Resources Intervention Fund for the promotion of the exploration of new minerals and to strengthen the regulatory capacity of the Ministry.

 

Plans are also underway to assemble a $600M investment fund for the sector, working with entities such as the Nigerian Sovereign Investment Authority, the Nigerian Stock Exchange and others.

  • Concerted Implementation of Roadmap

As you may know, the Roadmap provides for the creation of the Mining Implementation and Strategy Team (MIST), which is a multi-stakeholder team with the mandate to guide the implementation of the roadmap. The MIST became fully functional in 2017, with the following terms of reference:

  • Form the secretariat and implementation office for the execution of the action items and priorities in the Roadmap.

 

  • Identify key low cost / low hurdle actions to be implemented by the Ministry, industry and other stakeholders that can start to build confidence in the mining revival, and create a narrative to drive increased investment.

 

  • Provide investment advice to the Minister and the Ministry regarding revival and expansion of the mining and mineral sector.

 

  • Develop a resource (financial and non-financial) mobilization strategy for the mining and mineral sector.

 

  • Develop a logical framework matrix that spells out priorities, key performance indicators (KPIs), targets/benchmarks timelines and Results-based Action Plans.

 

  • Develop a framework for monitoring and evaluating the implementation process and progress. Identify baselines, implementation inputs, outputs, outcomes, measurement tools, and their linkages towards the country development objectives of economic diversification, job creation, poverty alleviation and sustainable development from mining.

 

  • Develop an accountability framework (internal control systems) for management and delivery of the Action Plan.

 

  • In partnership with the Ministry, facilitate the development and monitor of institutional and annual work plans that leverage the full capability of the Ministry’s technical teams to support the delivery of the Roadmap; as appropriate, develop capacity building programmes to ensure effective delivery of outcomes contained in the strategic framework.

 

  • Develop a communication strategy for articulating the implementation process and progress to different audiences, including investors, the President, Federal and State Governments, the public, NASS, etc. on a regular basis.

 

  • Undertake a stakeholder mapping and engagement exercise to determine the roles and responsibilities of government, civil society organizations, communities, community based organizations, mining associations, academia, trade unions, religious groups, women groups, media parliament, media, and professional associations, etc.

 

  • Improved Stakeholder Engagement

 

As we embarked on writing a new chapter in the mining sector in Nigeria, there are four main themes that have been guiding our exertions. These are: Transparency; Accountability; Participation; and Jurisdiction. The Roadmap identified the need to improve on the engagement of stakeholders at the sub-national level, particularly the state governments and communities, in order to achieve more beneficial participation of these critical stakeholder groups in the mining sector. This has inspired our establishment of the National Council on Mining and Mineral Resources Development. The NCMMRD supports the aspirations and objectives of the roadmap, and is designed to be a well-structured platform where stakeholders in the sector can converge periodically to develop policy advisory, validation, and other interventions, to effectively guide Government in achieving the full implementation of the Roadmap and the achievement of the targets contained therein. Membership of the NCMMRD comprises all State Commissioners with oversight of mining in the respective states as well as other stakeholders in the sector.

 

As the mining sector in Nigeria develops over the long term with the support of groups such as the NCMMRD, we expect the following features to evolve:

 

  • A robust institutional and governance framework that provides adequate oversight and guidance;

 

  • Stronger participation and shared responsibility from the states and communities;

 

  • A wider spectrum of vibrant participants across the entire value chain;

 

  • A solid archive and database of geo-sciences research and data that actively encourages investor participation;

 

  • A thriving enabling environment that provides the key support infrastructure and services that enables the industry to

 

Also in relation to this, we have collaborated with the state governments to ensure the reactivation of State Minerals Resources and Environmental Management Committees (MIREMCOs) as provided for by Section 19 of Nigerian Minerals and Mining Act. Accordingly, we provided mobilization funds for 10 State Miremcos, and also procured operational vehicles for the affected states. Our efforts in this regard are in the spirit of cooperative federalism in the sector, in order to deepen the participatory governance of the mining sector.

 

  • Improvements in Geological Prospectivity

We recognize that improving on our collection and dissemination of geosciences data is also a critical enabler of success. In 2017, we have worked on expanding the library of data we have on our mineral endowments and are happy to report on the successful implementation of the following:

  • Completed the characterization of Kaolin in Ekiti state.

 

  • Completed the exploration for gold in Niger.

 

  • Generated the geology and mineral database of 30 States.

 

  • Operationalized MOUs with China, Morroco, South Africa, etc.

 

  • Engaged SGS in upgrading the NGRL, Kaduna to achieve ISO standard.

 

  • Conducted capacity building of greater than 20 officers under the aegis of the EuroGeoSurvey/OAGS PanAfGeo programme.

 

  • Secured the delivery of 26,000 line KM of Electromagnetic data.

 

  • Carried out the geological mapping of 1:50,000 Sheets 53 Maru (NW,NE,SW,SE].

 

Our ministry also visited the British Geological Survey, Keyworth Nottingham. United Kingdom to discuss the retrieval of all Nigeria geo-scientific data, maps, reports and other documents held in the United Kingdom from the colonial period. This activity is on-going and will lead to the installation of a modern IT infrastructure and data system to avail a comprehensive data dissemination of data to stakeholders.

 

  1. Distinguished ladies and gentlemen, it is worthy of mention that this year, our Permanent Secretary, Mr. Mohammed Abbas retired after a meritorious career in the Civil Service. Along with him a number of our senior management staff similarly retired recently including: Engr. Dauda Awojobi, former Director, Mines Inspectorate; Engr. ALSO Abdulahi, former Director Steel and Non-Ferous Metals; Mr. Paul Boyo, former Director, Finance and Administration; Mr. Nathaniel Obienu, former Director, Metallurgical Inspectorate and Raw Materials Research; Mr. S.M. Oluwole, former Director, Human Resources; Mr. John Olawale, former Director, Planning Research and Strategy; and Mr. Sanusi Jibril, former Head of Minerals Promotion Centre.

 

It is on record that these patriots contributed to implementing very crucial reforms in the sector at a very important time in our country’s history, doing so with the highest sense of diligence, professionalism and integrity. We thank them for their service and wish them well in their future endeavours.

 

Our ministry has anticipated this rather significant turn-over of senior management staff, and has carefully implemented a Succession Planning strategy to ensure those left in the system are competent and equipped to carry on the good work. We have conducted a broad range of capacity building programmes in concert with several partners including the Governments of South Africa, Egypt, Australia, Morocco, e.t.c. We remain committed to human capital development, towards deepening the knowledge assets and capacity in the sector. We have therefore committed N100million from the intervention funds to support Geo-sciences research in our tertiary institutions through the provision of research grants to select universities.

 

Our overall goal is to ensure that as we grow the sector, we also ensure measures are in place to grow the capacity of participants in the sector towards ensuring the sustainability of our reforms over the long term.

 

  1. Outlook for 2018

Distinguished ladies and gentlemen, our reforms which we advanced in 2017 have been targeted at repositioning and de-risking the sector. We are extremely proud of our contributions to the economic recovery we are now witnessing in the country and are geared to do more in 2018 to contribute to building a strong and diversified economy.

The Mining sector remains a critical factor in the implementation of the Economic Recovery and Growth Plan (2017-2020) which projects that the minerals and metals sector would be one of those to drive Nigeria’s recovery by growing sectoral contribution to GDP from N103 billion (2015) to N141 billion in 2020, at an average annual growth rate of 8.54 per cent.

To create wealth, we recognize we need to improve on beneficiation as wealth only comes from creation. We recognize the vast value chain of Mining as a potential source of entrepreneurial activities, wealth creation, and jobs creation in Nigeria. Technical and business innovation is continually needed to maintain the industry’s international competitiveness and to ensure that mining is conducted in an environmentally sustainable manner that is aligned with global best practices. The value of all aspects of mining to Nigeria is encapsulated in the Mining Value Chain, extending from exploration and discovery through mining and processing to waste disposal.

The Nigerian Mining industry holds a promise that we would continue to work hard to deliver. We expect to sustain the growth trajectory we have achieved by stimulating new exploration activities, increased production from active mining, functional (and expanded) processing and refining capacity, and higher value-addition in exports. The net outcome will be the creation of thousands of direct jobs and potentially hundreds of thousands of indirect jobs.

  1. Gold Exchange Programme

Notably, one of the key projects we are embarking upon in 2017, in partnership with some state governments and the private sector is a Gold Purchase scheme. The mandate of the scheme will include equipping of the artisanal miners; provision of extension services; and the off-take of all the gold produced by the participants in the scheme. The aim is to facilitate employment creation, poverty reduction, and increase in revenue to the federation account.

Towards the accomplishment of this presidential mandate, the FMMSD has extensively reorganized the Mining Inspectorate (MID); and Artisanal Small-Scale Mining (ASM); departments and set up an Investment Promotion and Mineral Trade department (IPMT). A Special Purpose Vehicle (SPV) would be licensed by government to manage the gold purchase scheme.

 

  1. Geological Prospectivity

Also, in 2018, our ministry would undertake extensive Electromagnetic Airborne Geophysical Survey of promising parts of the country. We aim to work with competent consultants to deploy logistical and technical equipment with radiometric, magnetic, electromagnetic and allied capabilities, to capture and provide analysis of the geology of Nigeria, and the mineralization of the areas covered. We are also working towards the completion of the equipping of the NGRL, as well as the completion of our National Mineral Database, and will, in collaboration with the China Geological Surveys conduct an extensive geochemical mapping programme across the country.

 

  1. The foregoing would avail sufficient data for interpretation and analysis of the to allow for strategic planning and targeting of potential areas for further exploration work, and ground verification of the data from the ‘AGS’. We consider this a very important part of our work in 2018, to deliver a comprehensive bankable data of our mineral endowments across the country.

 

Distinguished ladies and gentlemen, we remain committed to the consolidation of the reforms we are championing and the continuity of the programmes and policies we have touched on earlier. We thank you for your support in 2017, and count on you to continue working with us as we make progress ‘On the Way to Shared Mining Prosperity’.

 

Thank you for listening.

Dr. Kayode Fayemi, CON

Minister

Abuja, Nigeria | December 21, 2017