FG engages States, mining communities for effective regulation, sustained development of sector

Vice President Yemi Osinbajo

In order to ensure the production of a clear working document that spells out the roles and responsibilities of various tiers of government, the Federal Government has kick-started development collaboration with the 774 Local Government Councils and mining communities across the federation.

Vice President Yemi Osinbajo who spoke declared open, the maiden edition of the strategic engagement on Sustainable Mining by the Federal Ministry of Mines and Steel Development with Nigeria’s Local Government Chairmen and other critical mining stakeholders on Thursday, described the development as a milestone in the effort of government to work in synergy with relevant stakeholders towards strengthen existing framework for ensuring that environmental degradation is remedied.

He explained that the Federal Government cannot effectively regulate mining without working with States, Local Governments and mineral-producing communities, stating that ‘communities where mines are located must also have some direct benefits aside from jobs for their residents.’ According to the Vice president, ‘government must find a formula for compensating the communities for environmental degradation and erosion.’

Discussing the derivation of revenues from mining sector, the Vice President said mining revenues go to the Federation Account and is shared between the Federal, States and Local Governments, noting that the states where the resources come from get 13% derivation in addition to their share.

The Vice President discouraged the export of unprocessed raw minerals, noting that ‘refining, processing or beneficiation is the only real way to maximize our mineral wealth and create good paying jobs and opportunities for our people.’

He said the Federal Government, States and Local Governments have to jointly develop working arrangements to ensure that mining is attractive to investors, profitable for States and Local Governments, not just from proceeds but also from personal income tax paid to States by mine workers and staff of mining companies, adding that even where these roles and duties have been defined in existing legislation, the new synergy ‘is an opportunity to simplify the language, explain the relationships, take input on implementation concerns, and get everyone’s buy in.’

The Vice President commended the Ministry of Mines and Steel Development for the initiative, stating that the ministry has been fortunate in having able, dynamic and farsighted ministers since the administration came into office in 2015.

‘I encourage you to continue to approach your role as the regulator and administrator of the nation’s mines and metals sector with open mindedness and flexibility especially in your collaboration with the States and local governments,’ he said.

‘I must also urge all officers of the Ministry to rededicate themselves to the realization of the set target of a 6% contribution of the mining sector to the nation’s GDP by 2025.

He said the strategic engagement with the leadership of the 774 local governments is critical, stating that it is apt and timely especially as the federal government through the Ministry of Mines and Steel seeks to fully implement its robust and wide-ranging remit in policy and legislation.

‘This engagement will certainly help in explaining the regulatory framework to the governments at the community level where most of the mining activities take place. It will enable the ministry and other stakeholders to get direct feedback from the local government authorities and those who have to deal with these issues daily.

‘Finally, let me say to all participants that this engagement is one that could be a game changer for mining in Nigeria, and it could mean a new era of huge earnings and prosperity for our people from our mining resources. But this will only happen if we adopt a collaborative and cooperative approach. If we work together, we will reap far more than we could ever gain by working alone.

Minister of Mines and Steel Development, Arc Olamilekan Adegbite said the recent establishment of the Investment Promotion and Mineral Trade Department demonstrates government’s commitment to welcome global investment partners.

While encouraging the 774 LGAs to take advantage of the department, the minister assured that enquiries about any mineral that has the attention of foreign investors will be promptly attended to, adding that the ministry is putting in place incredible incentives to support investors and to unlock the sector.

According to the minister, the incentives include Customs and import duties waiver for plant, machinery and equipment imported for mining operations, tax holidays of between three to five years as applicable, free transferability of funds and permission to retain and use earned foreign exchange, and capital allowances of up to 95% of qualifying capital expenditure. Other incentives include deductibility of environmental costs (money meant for environmental remediation will be tax free) and 100% ownership of mineral properties.

Executive Governor of Ekiti State, Dr Kayode Fayemi reiterated the vision of the Federal Government to reposition the mineral and mining sector to contribute optimally to the country’s revenue base and create job opportunities for the citizens.

He noted that the committee that drafted the roadmap for the growth and development of the Nigerian Mining sector in 2016, focused on building consensus on the critical actions required to move the sector forward including engaging all the stakeholders.

He advocated the need to continue to ensure that grassroots stakeholders were well positioned to participate meaningfully in the industry, adding that the local inhabitants must be the first to benefit from any mining activities in their locality including employment generation, poverty reduction and promotion of rural economies.

Dr Fayemi, who was Minister of Mines and Steel Development between 2015 and 2018, stated the need to empower grassroots stakeholders to assist in eradicating exploitative labour practices and gender inequalities in the industry thereby promoting environmental justice as well as ensuring safety and security in mining communities.

He assured the delegates that Ekiti State and the Nigeria Governors Forum (NGF) would continue to work with the Ministry to strengthen the objective of cooperative federalism and beneficial participation of all stakeholders in the sector.

Governor Fayemi said, “I am pleased that the vision of positioning the Nigerian mining sector as a frontier of the Buhari administration’s goal to diversify our revenue base, and create shared prosperity for all, has made remarkable progress under the watch of Minister Adegbite and Minister of State Ogah.

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