FG Targets N250bn Revenue from Solid Minerals Sector to Fund 2016 Budget, Diversify Economy

Posted by African Examiner Featured, Latest Headlines, News Thursday, February 18th, 2016

Ayodele Afolabi, Abuja.

BALTIMORE, MD (AFRICAN EXAMINER) – The Federal Government of Nigeria is targeting N250billion as revenue from the solid minerals sector this year as a result of its resolve to diversify from oil resources.

This was disclosed on Thursday by the Minister of Mines and Steel Development, Dr. Kayode Fayemi, in an interview with journalists after defending the 2016 budget estimates of his ministry before the Senate Committee on Solid Mineral.

Fayemi who lamented that long neglect of the sector by past administrations had really affected it, maintained that the feat is achievable, pointing out that “what has been lacking in this sector before now is the political will on the part of the leadership”.

He said: “Mr President has been very clear that this sector has to live up to its dealing and one of the ways in which we must do that is by becoming an alternative generating vehicle for the country”.

“We have sat back, we have reviewed the activities of the sector, we have met with the critical stakeholders in the sector and we have understudy what obtains in other countries that have made the success of the sector and we have come to a conclusion that we can certainly raise the revenue profile”.

He added that the ministry would ensure desegregation of its activities and revenue for easy access by the Federal Inland Revenue, FIRS.

He, however, stressed the need for a synergy among all the stakeholders operating in the sector, including the federal and state government, as well as various private operators, in order to raise the revenue profile of the ministry accruing to the government.

According to him, the present administration is taking steps to discourage miners who use exploration license as mining lease, a practice he said, had hindered the development of the sector over the years.“There is a lot that is being generated in the sector right now that is not even identified with the sector that goes directly to the FIRS, and because we are putting a lot more focus on automating the activities of our mining cadastral office, we would be able to also plug the leakages.

“We also have situations in which you have people operating in the sector even without license across the board but if we are able to achieve the kind of synergy I talked about, we would certainly raise the revenue profile of this sector”, he stressed.

Some members of the committee, advised the federal government to consider the establishment of a Solid Minerals Development Bank to facilitate access to funding for mining activities in the country, but the minister informed them that his ministry had made reasonable progress in that regard.

“I informed them for example, that I have been speaking with the Governor of the Central Bank, I have been speaking with all the banks managing directors, about ensuring that the sector becomes more engaging and active within their own banks, and in principle they have all agreed to that.

“I have also suggested to them that we need an intervention fund for the mining sector like the Agric Bank in the CBN, and most of the financial institutions agree with this.

“What we are not definitively pronouncing on is whether there should be a solid minerals development bank but we think that instead of replicating new institutions, is it possible for us to ensure that those institutions that exist now, can become practical vehicles for delivering on the objectives of funding the investors in the sector.

“If that is not possible, we would objectively look at what the distinguished Senators have proposed about the solid minerals development bank, and advise the President accordingly”, he explained.

The minister also defended the sum of N750million slated under the computer and software updating subhead, noting that the figure is needed to facilitate the ongoing digitization process in the ministry and ensure automated operation of all its activities.