States must have a say in how investment in the mining sector is conducted. But for this to happen, there must be a harmonised legal framework between the federal and state governments to create a robust climate for investment flow, reports AMBROSE NNAJI.
Collaboration between the federal and state governments will be beneficial to creating an investment climate. This synergy is inevitable because the mining communities are in the states just like the mining sites. There is no mining site that is located outside the states or local governments.
To this extent, industry stakeholders said states must have a say in how investment in the sector are steered. But, the Nigerian Minerals and Mining Act doesn’t allow direct investments from state governments without collaboration with the Federal Government.
The Nigerian Minerals and Mining Act 2007 repealed the Minerals and Mining Act. It regulates the exploration and exploitation of solid materials. The Act confers control of properties and minerals in the state and prohibits unauthorised exploration or exploitation. It says any land where mineral has been found in commercial quantities shall be acquired by the Federal Government in accordance with the Land Use Act. Property in mineral resources shall pass from the government to the person by whom the mineral resources are won, upon their recovery in accordance with provisions of the Act, among other things.
The Director of Communications and Advocacy, Nigeria Extractive Industries Transparency Initiatives (NEITI), Dr. Orji Ogbonnaya Orji, agreed it was the grey area the states and the Federal governments needed to harmonise to make room for favourable investment flow.
NEITI, he said, has urged the federal, state and local governments to shift attention from oil and look at the solid mineral sector, adding that the potential in the solid mineral sector is huge.
Orji recalled that a roadmap had been developed by the Ministry of Mines and Steel Development, which NEITI also made input. According to him, the roadmap looks very attractive to investors, the government and the citizens, adding that what’s required is the political will and collaboration from all tiers of government to implement the roadmap.
“In the implementation, if there are bottlenecks that needed to be removed, it would not be difficult to be done but except we engage in the process and reduce this tendency to think that oil will solve all our problems, we will continue to make very little progress,” he insisted.
Orji, who spoke with The Nation on telephone, noted the law invested ownership of mineral resources on the Federal Government. However, it didn’t say the states cannot invest in mineral resources. According to him, it only requires the states to find a way to engage with the Federal Government and leverage the fact that the resources are in their domain.
He, nonetheless, recalled that some states were considering that. According to him, the government of Taraba State has spoken on how the state was looking at collaborating with the Federal Government.
Again, at the last economic summit held by the Southwestern states, they also made some decisions to discuss with the Federal Government on how it can cede some of its powers to enable the states come in to invest.
Orji stated that an investor goes to the Federal Government to get mining licence, and yet return to the state where the minerals are located. He insisted something must be done about this process in terms of legislation to make for free and easy flow of investments.
“We are not saying the Federal Government should not control that. What we are saying is that the states should not think that because Mining and Mineral Act is invested in the Federal Government, they have no stake in it. They have and they can engage with the Federal Government and see how they can partner to allow for free flow of investments in the sector,” he said, adding that even states could invest in mining but they couldn’t do that in isolation without the Federal Ministry of Mines and Steel Development.
On why the collaboration is lacking between federal and state governments, Orji said: “It was also part of the ongoing campaign for us to look beyond oil. When some states know they can go to the Federal Government and get a share of the oil revenue, why do they have to border to diversify their investment. As long as we continue to depend on oil and ignore to do something creative by looking elsewhere, including solid minerals sector, we will continue to have problems.
“Because investment in mining is capital intensive and it does not yield money immediately, it needs a gestation period before the money can start coming. But any state can take that bold step, that’s what NEITI is emphasising – diversification of the economy. It has to be a continuous investment in the mining sector from one administration in the state to another up to an effective period of time.
“If you are investing in coal, gold mining, it’s not something that you will put in money today and expect returns on investment soon. Sometimes, you require investment in that sector up to 10-20 years, and when the investment stabilises, generation to generation will reap from it.”
‘’There are states that can survive on other services, tourism and sports, among others, but for the fact that they are sure that every month allocations will come from oil, why do they have to bother? Two or more states or even as a zone, can raise funds and invest in the solid mineral sector in their states, working in partnership with the federal agencies. Such agencies include the Mining Cadastral office, the Mining Inspectorate Division (MID), the Federal Mines and Steel Development, the Geological Survey – they are all there to provide the leadership where necessary, but except you make that fundamental step, nothing happens,’’ he said.
The survey conducted by NEITI shows that every state has one form of mineral deposit or the other. Therefore, they have to seek ways they can partner with the Federal Government to leverage their minerals. But in all these, it’s important we create the atmosphere that will attract investors. One of them is infrastructure, good roads, water, stable power supply and security. When all these are in place, it will become attractive to investors, he added.
Director, Solid Minerals Development Company, Taraba State, Matsai David Angye, also called for synergy between the federal and state governments to move the sector forward. “When the federal, states and local governments work hand in hand and synergise, investments will come,” he said, adding there are more to be discovered in the sector.
Angye urged the Federal Government to address the issue of insecurity, noting that mining is capital intensive and as such, it needed a peaceful environment to operate. He advised the government to consider giving the states or relevant organs in the states a free hand, adding that there are some policies of government at the federal level that hinder investors coming in.
“If there’s a synergy and understanding between the federal and state governments, it will increase productivity and even the willingness. But by the time you direct everything from the federal, which most times the states are not even aware of what’s happening, when the investors come to the states, it’s not what they think, they see on ground, they will always have stiff confrontation with the states.”
“But by the time there’s an understanding in the policy that favours the state and the locals, we will go hand in hand, that’s the clause the states don’t find comfortable. All over the states of the federation, we don’t find that exclusive right comfortable, the states should have a say,” he insisted.
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