A finance analyst, Dr. Ken Gudugi has expressed reservations on the recent announcement by the federal government to boost the mining sector with about N30 billion, saying “My fear for the fund is that the sector is not yet well structured in a way and manner you can put money and see the result as soon as possible.”
He argued that the sector is currently driven by illegal miners or miners without genuine certification, stressing that giving funds to such class of business operators will not do any good to the economy because checks and compliance monitoring will be hard to come by, thus creating scenarios that can blow away the hard earned funding after all.
Gudugi however, advised the federal government to first of all “Conduct a census of genuine operators in the mining sector, assess the standard of their operations in terms of environmental laws, safety provisions and sources of fund plus mining site certification”.
“Many of the miners we have in some parts of Nigeria especially in Northern part are illegal miners and they cannot be able to make good use of the funding unless they are trained and given the necessary certifications.
Only last week, the Federal Executive Council approved a N30bn intervention fund for the mining sector.
Minister of Mines and Steel Development, Dr. Kayode Fayemi said the approval of the intervention fund for the mining sector was in fulfilment of Buhari’s campaign promise to diversify the economy with emphasis on agriculture and mining sector.
The minister said the fund would focus more on exploration which he said was at the heart of mining.
He said, “If we really must attract mining investment into the country, we need investment-based geological data for those who are in mining to be engaged in the sector.
“This is necessary having looked at what has been done in other countries even smaller than Nigeria, countries like Burkina Faso spending averagely $300m a year on exploration and Ghana and Cote d’Ivoire and so on.
“This is why council approved this for mining and this is significant because this is the accessing of natural source development fund which has been made 1.68 per cent of the Federation Account, an equivalent of the Ecological Fund and the Education Trust Fund.
“It is meant primarily for agriculture sector, mining sector and the water resources sector and this will cover exploration primarily but also research and development in partnership with our universities.
“It will also cover security and mining in partnership with the Ministries of Interior and Defence and the DSS just to tackle the menace of illegal mining across the country.”
Fayemi said the fund would also support small scale miners with lands.
