The federal government’s quest to promote diversification of the economy through, especially in the nonoil sector is being eroded by nefarious activities of unscrupulous businessmen making brisk business at the expense of the country. Jide Babalola, Assistant Editor, in this report, captures the situation at Baba-Tsauni, Nigeria’s first mechanised goldmine project
Baba-Tsauni mining project that was envisaged to become Nigeria’s first mechanised gold-mining project with the creation of 1, 700 jobs this year alone is now held in limbo, in defiance of the federal government’s Economic Recovery and Growth Plan focus labs initiatives.
To potential international investors who had identified with the epochal optimism spurred by the federal government’s comprehensive Economic Recovery and Growth Plan (2017- 2020), there may be concerns that Nigeria’s first mechanised gold, lead and zinc mining project and the prospects for new 1, 700 initial jobs is being held in limbo.
In May this year when the federal government’s Economic Recovery and Growth Plan Focus Labs commenced, with applause from a global audience, one of its major achievements was the immediate unlocking of the Baba-Tsauni Mining Project.
But months after, it is becoming clearer that it may require nothing less than a direct intervention from President Muhammadu Buhari to resolve the needless conundrum that has tied up plans to begin the direct employment of at least 1, 700 Nigerians, accrual of multi-million dollar taxable income along with other economic multiplier benefits at the Baba-Tsauni mines near Gwagwalada, Abuja.
Convinced of the huge economic potential for government and the private sector, government officials, including the Nigerian Export Promotion Council had outlined projections that would have seen to the mining and processing of lead, zinc and gold by the Iron Ore Mining company – a firm jointly owned by Nigerian, Australian and other investors. A buy-in by the Germany-based global headquarters of Julius Berger, with preparedness for immediate deployment of equipment worth more than $100 million and the resolute steps of the Economic Recovery and Growth Programme (ERGP) Focal Lab all now seem caught up in bureaucratic red tape.
Ergp Focus Labs
Determined to fix the economy, the federal government articulated its economic blueprint, the Economic Recovery and Growth Plan (2017-2020), a medium term plan robustly tapping from the experience and vision that transformed Malaysia. On May 15, this year when they both declared the ERGP Focal Labs open, both the Vice President, Professor Yemi Osinbajo, and minister of Budget and National Planning, Senator Udo Udoma, were upbeat about prospects for unlocking huge investment possibilities that had been entrapped in bureaucratic bottlenecks and other encumbrances.
In separate speeches, the duo also disclosed that the six weeks brainstorming and consultations by public and private sector under the auspices of the ERGP Focus Labs was laying solid foundation for firm commitments for US$ 22.5 billion and creation of 513, 000 jobs between May this year and 2020, with projections for the inflow of US$ 39.1 billion investment and creation of about 716, 079 jobs between now and 2025.
Baba-tsauni Mines
Curiously, the IOM’s Baba-Tsauni Mining Project was expected to be an instant beacon of investment success to be held aloft by the federal government in attracting and reinforcing foreign investors’ interest in the Nigerian environment. Indeed, one of the primary goals for setting up the ERGP Focus Labs was to unlock investment initiatives that had been bogged down by red tape or other related factors over the years. Promoters of the Baba-Tsauni Mining Project envisage investment of about $36 million and the employment of an initial 1, 700 employees but all these are yet to see the light of day.
The Baba-Tsauni community which already enjoys a primary school built by IOM Limited had expected more but instead, illegal miners of all sorts and foreign buyers who all pay no tax to government audaciously continue running around the area, digging holes that may later become traps for man and animals.
Details gathered from relevant ministries indicate that the Iron Ore Mining Limited’s Baba-Tsauni Mining Project was granted a statutory mining lease in 2011. In 2017, the Mining Cadastre Office (MCO) sent it a letter, attempting to amend the mining lease, stating that it made an ‘internal mistake’ years earlier. One of the readily apparent issues is the issue of sanctity of title – a global principle that firmly assures investors in mining about firm guarantees of tenure and operational coverage in view of huge expenditures and long gestation period that the business entails. IOM’s mining lease, like many others, is for a period of 25 years, with the option· to renew for another 25 years.
Resolved Yet Unresolved
There is no doubt that with the very broad government and organised private sector networks and deep thinking that culminated into the Buhari administration’s economic diversification blueprint easily comes across as an inspiring collaborative effort focused on multi-generational dividends.
It seems very unfortunate that the issues holding back the commencement of Baba-Tsauni Mining Project now ambiguously remains ‘resolved’ as the MCO says while investors cry out about its being deliberately unresolved.
The ERGP articulates government’s vision for the country and says the foundation for long-term growth, with an underlying philosophy of optimising local content and empowering local businesses towards restoring growth, investing in people and building a globally competitive economy.
The ERGP Focus Labs is a problem-solving platform that focuses on tackling or resolving issues faced by a business or other entities through an iterative trouble-shooting process. The idea of adopting Focus Labs to fast-track the attainment of the strategic objectives of the ERGP was the outcome of the federal government cabinet retreat on ERGP Implementation held in Abuja on August 10, 2017 under the theme, “Getting the Implementation Right”.
The federal government’s Executive Order on ease of doing business aligns with the ERGP. Also, government’s ‘Roadmap for the Growth and Development of the Nigerian mining industry’ adopted in September 2016 envisages a Nigerian mining industry that would be worth $27 billion in direct and indirect contributions or 3% of GDP by 2025.
Nonetheless, the much feared Nigerian factor has come to haunt the Baba-Tsauni Mining Project, as the Mining Cadastre Office unequivocally asserts that everything about it is now back at the pre-ERGP Focus Labs situation. While stating the office’ understanding of the global principle of sanctity of title, MCO’s Director-General, Alhaji Mohammed Amate, wants IOM which holds the mining lease to cede 40 cadastral units or eight miles of the 296 cadastral units it was officially granted. On the other hand, IOM is insisting that mining processes forbid doughnut-shaped or overlapping leases and that its legal rights cannot be tampered with, especially after the then minister of Mines and Steel Development, Mr. Kayode Fayemi, had unambiguously given IOM a formal approval to go ahead with its project.
At the Ministry of Mines and Steel Development, officials believe that the erstwhile minister’s decision ought to suffice, especially as a letter dated 25th May, 2018 and titled: “Re: Grant of Mineral Title number 11675 ML Belonging to Messrs Iron More Mining Limited” had directed the company to take charge of the 236 cadastral units mining site as covered by its mining lease.
While officials at the MCO insist that their position should not be interpreted as an issue of government agencies pursuing divergent ends, they still hope to convince IOM Limited that its mining lease deserves to be ‘adjusted’ and that is the crux of it all. Thus, instead of the immediate deployment of multi-million dollar machineries by Julius Berger International, endless and undue delays continue to bog down what should have become of the shining examples of the success of the federal government’s ERGP Focal Labs. Sadly, for now, the only beneficiaries are illegal miners, unlicensed foreign buyers who pay no tax and government bureaucrats who surreptitiously facilitate illegal miners’ continued stay in such mining sites.
Once the federal government moves against the illegal miners and helps to actualise the launching of Baba-Tsauni Mining Project, such major positive signal may mobilise other serious global investors to how decisive interest in Nigeria’s mining sector.
For all these to happen, the ERGP Focus Lab took two decisions. The first is for the minister of Mines and Steel Development to issue a letter affirming the sanctity of Mining Lease 11675 that was granted to IOM and partners in 2011. Secondly, it asked the minister to direct the mines police to enforce the letter that was issued and eject all encroachers on the project site. Months afterwards, the two seemingly simple tasks are yet to be accomplished.
As Deloitte Touche Tohmatsu Limited, a UK company powered by approximately 245,000 audit, tax, consulting, accounting, business process solutions and financial advisory services once noted in its newsletter on ‘Nigeria’s Business Climate and Ease of Doing Business Initiatives’, enforcement and implementation of the Buhari administration’s orders remains a critical issue with MDAs that are already attuned to flagrant disregard of extant laws. All those acquainted with the vision, efforts and projections of the ERGP and the ERGP Focus Labs will easily shudder about accommodating the obnoxious ‘Nigerian factor’ and the prospect of whittling down chances of accelerating Nigeria’s economic development. Such is the exact antithesis of the Buhari administration’s ‘change’ mantra.
