The report that Nigeria lost over $3 billion between 2012 and 2018 to illegal gold mining is disturbing. Data from the Ministry of Mines and Steel Development show that illegal gold mining is thriving in spite of government’s threat to prosecute the culprits. President Muhammadu Buhari recently lamented that illegal gold mining is undermining the nation’s economy.
Also, Nigeria lost an estimated $9 billion to illegal mining activities between 2014 and 2015. However, despite this loss of revenue, the good news is that the gold mining subsector can be exploited to diversify the economy and make it less dependent on crude oil revenue. Good enough, Nigeria has untapped deposits of 44 minerals, including gold, iron ore, tin and zinc.
According to the National Bureau of Statistics (NBS), the mining sector has the potential to contribute 23 per cent to the nation’s Gross Domestic Product (GDP).
A survey by the Ministry of Mines and Steel Development shows that there are gold deposits in Abuja, Abia, Bauchi, Cross River, Edo, Niger, Sokoto, Kebbi, Oyo, Kogi, Zamfara, Osun and Kaduna states, but, illegal gold mining is reportedly thriving in these states. Already, the Federal Government has licensed two gold refineries located in Abuja and Ogun state. According to the Minister of Mines and Steel Development, Olamilekan Adegbite, the Central Bank of Nigeria (CBN) will be the off-taker, holding some of the gold in its reserves.
Gold from Nigeria, when properly refined and purified, could be as good as any gold from any country in the world. Nigeria has estimated gold reserves of over 200 million ounces. Currently, an ounce of gold goes for $1,800 in the international market and is projected to sell at over $2,000 at the end of 2020. It is expected that improved gold mining in Nigeria will generate no fewer than 250,000 jobs and over $500 million yearly in royalties and taxes. Without doubt, revenue from gold will boost the nation’s foreign exchange reserves.
It is heartwarming that the government has put in place programmes that will give gold mining a new impetus as well as check illegal gold mining activities and smuggling. At the official unveiling of Made-in- Nigeria mined gold bar by the Presidential Artisanal Gold Mining Development Initiative (PAGMDI) in Abuja, recently, President Buhari reiterated the commitment of his administration towards establishing gold buying centres. The programme is designed to improve sourcing and refining of high-quality gold bars and provide artisanal miners and Small and Medium Enterprises (SMEs) the platform to reflect the value of their work.
We believe that this is a step in the right direction. We also urge the government to ensure that the hazards associated with gold mining are reduced to the barest minimum. Interestingly, a 12.5kg gold bar, processed and refined in the country in accordance with the London Bullion Market Association (LBMA) standards, was purchased by the apex bank for over N268 million. It is a sign that gold mining is now another source of national revenue.
However, there is need for a robust exploration programme to determine the quantity and quality of Nigeria’s gold through massive investment to harness the commodity maximally. Good enough, the plan to fully tap our gold resources is coming at a time the International Monetary Fund (IMF) is predicting that Nigeria’s debt-to-Gross Domestic Product ratio may rise to 36.5 per cent this year, up from the 29 per cent it was in 2019. The mining sector, especially gold, holds the key to the realisation of this prospect. However, due to illegal mining, the sector’s contribution to GDP has dwindled from about five per cent in the 1960s and 1970s to less than one per cent currently. Between 2007 and 2016, gold and other solid minerals provided only $1.777 billion or 0.55 per cent of Nigeria’s GDP.
There is urgent need to strengthen the solid minerals Act so that only those with licence to prospect for gold and other solid minerals can engage in such exploration. This will encourage investments from the private sector. The present scenario where individuals and foreigners are involved in illegal gold mining is unacceptable and should be stopped.