How institutional collaboration boosts revenue generation in mining sector

The reforms in the mining sector aimed at maximising inter-agency collaboration, blocking revenue leakages, and sustaining the gains of economic diversification have led to an increase in the mining sector’s contribution to the GDP of the country.

Nigeria’s efforts at pursuing economic diversification have been bedevilled by various policy summersaults in a solid minerals sector where successive governments failed to demonstrate the political will and self-denial required to achieve success.

Indeed, mining industry experts agree that one major drawback of economic diversification is the fact that policymakers do not have a sufficient understanding of how the mining sector must work in sequence to generate sufficient revenue.

Until recently, successive governments have either put the cart before the horse or lacked the political will needed to put the horse before the cart.

In discussing the state of the sector concerning revenue generation, stakeholders agree that recent reforms, coupled with inter-agency collaboration have played key roles.

This is evident in groundbreaking breaking outcomes in revenue scored by the sector in the operations of the Nigeria Geological Survey Agency (NGSA) and the Mining Cadastre Office (MCO) in recent times.

Reacting to this development, President, Abuja Chamber of Commerce and Industry (ACCI), Engr. Auwal Ibrahim Bununu attributed the increase in mining investments in the country to the working relationship between the NGSA and MCO,’ saying agencies in the mining sector should take a clue from it.

While saying that economic diversification via the mining sector is chiefly about increasing the revenue generated by the sector to the GDP, he explained that the success in the strategic pursuit of geoscience data by the NGSA in the past six years gave impetus to revenue generated by the MCO during the period under review.

“Apart from being Chairman of ACCI, I am an investor and I understand the sequence of developments that must lead to huge revenue generation in mining,” he stated.

Bununu added that through internal reforms supported by the NIMEP project, NGSA was able to generate information on the solid minerals of Nigeria, and the availability of the mineral information continued to attract mining investors to the country.

Speaking on NGSA reforms in geodata sourcing and publicity concerning reforms in mining cadastre administration, Bununu explained that the ability of the Federal Government to put in place a National Geodata Center of the NGSA is an effort on the same pedestal as MCO’s online cadastre administration, stating that the Geodata Centre will provide real-time mineral information to prospective when commissioned for use.

As part of the results of efforts made to maximize reforms in mining cadastre administration, the MCO raked in unprecedented N25bn from 2006 to 2023, a figure that represents the highest revenue generated by the agency within the period.

According to analysts, the period of this investor boom conveniently accommodates the six years when the NGSA supervised the NIMEP Project that supported the Agency’s effort at mineral exploration leading to the achievement of a recorded geodata sourcing that was not achieved within the same timeframe in over 100 years existence of the NGSA.

A former Director of Registry at the Mining Cadastre Office (MCO), Dr Sidikat Salawu analyzed the significance of the NGSA to MCO in revenue generation.

While commending the MCO for digitizing mineral licensing to support mandate success, she noted that the resounding success of the MCO in revenue generation should be correctly understood as one of the outcomes of the success of the Federal Government in Geological Survey and Geoscience Data generation, adding that the significant generation of geo data by the NGSA in the past six years is significant, and is a key source of encouragement to investors.

According to her: “It provided investors with the mineral information they need to invest in Nigeria. I am not a layman in the sector, I would not just look at an agency and expect it to give me so much revenue. In discussing revenue, someone who understands how the sector works would first look at the mandate of the organization, and then evaluate it within the context of taxpayers and revenue collection.”

While calling for more collaboration between the NGSA and the MCO, the former Director of the Registry said: “By its mandate, NGSA is not expected to generate revenue, rather, its mandate is to generate geo-science data on various minerals.

‘All over the world, the Geological Survey of nations generate data that principally drives investment in mining. This is because geo data is the first thing any prospective investor will search for when he is contemplating to invest in the mining sector.”

Dr Salau agreed with Engr Bununu that the geosciences data generated by the NGSA in the past six years has never been generated by the agency within the same timeframe in the over 100 years of existence of the organization.

She noted that the ‘influx of investors that MCO is welcoming is a result of the volume of geosciences data generated by the NGSA in recent times.

Salau, who said the role of institutional synergy cannot be overemphasized, said its effect is best visible in the results produced by the NGSA-MCO synergy that led to a period of boom that must be sustained.

Although stakeholders agree that there is room for improvement, especially since the Minister of Solid Minerals Development, Dele Alake while unveiling his agenda for the sector, said the Tinubu administration will plough the sector to generate no less than 50 per cent in revenues to the coffers of government.

To this end, stakeholders agreed that the milestones must be sustained and improved upon to ensure sustained progress in the sector, while grey areas must also be addressed.

Also, a Nigerian geologist and former Chairman of the Solid Minerals Development Fund (SMDF), Uba Sa’idu Malami, said any effort at economic diversification that does not prioritize the Federal Government’s sustained investment in geoscience data will not be impactful.

According to him, the resounding success of the National Integrated Mineral Exploration Project (NIMEP) which was satisfactorily supervised by the Nigerian Geological Survey Agency (NGSA), is an effort that should have been continued.

Malami, who lamented that the NIMEP project was halted, stressed the significance of the government’s direct involvement in geo data sourcing, saying: ‘When the Federal Government of a country drives mineral exploration when a national government directly invests in geodata sourcing like FG did via the NIMEP project, it has a significance; it shows that the investment destination-country is committed to safeguarding its investment and other foreign investments in that sector.”

Malami, who spoke shortly before ministerial portfolios were assigned to the ministers-designate, called on the administration of President Bola Ahmed Tinubu to invest more in geodata to strengthen the country’s chances of attracting FDI to the mining sector.

He said JORC-certified geoscience data on critical minerals of Nigeria (such as lithium) should be determined and presented to global investors.

Founder and Chief Executive Officer, Women In Mining In Nigeria (WIMIN), Engr. Janet Adeyemi commended the Federal Government for recent efforts made by the Nigerian Geological Survey Agency (NGSA) to provide geoscience data on minerals in Nigeria.

She, however, noted that mineral exploration for geoscience data should be a continuous effort, noting that if the progress is not sustained, it could retard the milestones recorded by the sector in recent times.