From Uche Usim, Abuja
The sixth Sustainability In the Extractive Industries (SITEI) Conference held in Abuja on July 19 and 20, 2017, ended with a clarion call on all players in the sector to place the collective interest of Nigeria far above any parochial considerations.
The two-day event attracted scores of stakeholders, mainly from the oil and gas and mining sectors, who brainstormed on ways to wean the country from over-reliance on offshore technical and financial support to one that would develop sufficient local capacity to participate in the global market.
The stakeholders in unanimously asked for support from government in the form of access to loans, better infrastructure, addressing security concerns, evolving sound operational framework and legislation, dismantling bureaucratic bottlenecks and generally creating of a conducive operating environment.
Delivering his keynote address at the opening of the programme, the Minister of State, Petroleum Resources, Dr. Ibe Kachikwu, said the time had come for Nigeria to play and maintain a prominent position in the global economy, adding that the first step remains developing the technical and financial capabilities of Nigerian companies.
Kachikwu said the Federal Government was already crafting at a five-year development plan for local firms, especially those in the oil and gas and extractive sectors, to make them strong enough to attract foreign partnerships and equally compete globally.
Kachikwu stated that domestic industries could contribute immensely to economic growth and development, and what was needed was more prioritised investments, dedication and fortification of the Nigerian brand.
The minister, however, lamented that the local economy has been perennially starved of investments in critical infrastructure, which has stunted the growth of local players who have remained trapped in outdated technologies that rob them of international recognition.
Kachikwu said the President Muhammadu Buhari administration aims to change the ugly narrative by building local capacity and uplifting the conditions of the people to enjoy the benefits of the nation’s oil wealth, which is critical to long-term sustainable development.
He said: “We need to do so much to trap money into our local economy and reduce capital flight. Globalising our local economy thus goes beyond value retention and trade-offs. Rather, strong government demand for local content investment through creation of infrastructural facilities and insisting work be done in Nigeria should be of paramount importance.
“Nigeria’s perception as a high-risk investment destination in some quarters is partly because the process of structuring a project financing deal with financing institutions is usually complicated and daunting; hence policies must be consistently directed at improving confidence in the investment environment. Nigeria as an emerging economy needs an effective local capital market that is properly regulated and supervised to bridge the huge infrastructure gap that exists in the oil and gas infrastructure sector,” he said.
Also speaking at the event, the Minister of Solid Minerals Development, Dr. Kayode Fayemi, stressed the need for Nigerians to think Nigeria first at all times.
He said: “Let us look inwards and see ways we can take this economy to the next level. Right now, Nigeria is at the bottom of the Fraser Index in mining. That is not a good development and that ranking came about as a result of several factors. It is a function of ease of doing business, poor and insufficient critical infrastructure like roads to mining sites, security for operators, policy framework and all that.
“But as a government, we are changing that. We want Nigerians to do the right thing. Stop this illegal mining. Come to the government and get necessary documents and support. We have started a pilot scheme on access to finance projects for local miners, small-scale miners particularly; N2.5 billion was set aside for that. The move is to encourage them grow the industry and that is to be managed via the Bank of Industry (BOI). We are not the one who will manage the money but BOI. The BOI would develop the criteria that would guide access to the money and ensure monitoring and evaluation of the process.
“We are also supporting bigger players who have proof of concept that they have been able to do exploration, particularly, and what they need is transition to production. We are happy to work with them to achieve that purpose.
“We don’t promote illegality and we want our nationals to operate legally anywhere they are. If they don’t, we cannot hold brief for them. We are encouraging Nigerians in the sector to formalise their operations so that they can grow in the sector.”
, especially those trying to eke out a living via mining. But the sector is rich and we will ensure it also grows and grows the economy of the country”, he said.
In her contribution at the event, the Convener of the programme and Chief Executive of CSR-in-Action, Bekeme Masade said the conference was totally aligned with national plans of building local capacity within the extractive industry sector which is worth $8 billion a year.
“Local/illegal refineries in Nigeria represent a mammoth industry which can create more jobs and lift millions of Nigerians out of poverty (Chatham House, 2013). Statistics in 2013 show that although the country makes an estimated $448,000 billion on crude oil daily, the average person in the Niger-Delta area lives on less than $2 a day.
“Although when the Federal Government released its Economic Recovery & Growth Plan (2017-2020), it recognised solid minerals as the big project required to leapfrog the economy to enviable height, in Nigeria today, the mining sector is marginally regulated and operated mostly by unskilled miners; with concerted efforts by the current administration to address those gaps.
“According to Nigerian Extractive Industries Transparency Initiative’s (NEITI) 2014 Audit Report, the major players in the mining sector only account for an estimated N11.6b from limestone production, in a market that experts estimated to be worth up to $100 billion to our GDP in four years, and with over 40 different minerals. NEITI’s audit of 2012 equally revealed that 70 per cent of the mineral endowments are located in the northern part of the country. Ironically, this is yet to lift poor people in the region out of poverty but has plaqued that part of the nation with environmental degradation and diseases”, she added.
Masade added that over 90 percent of mining activities in the country are within the cadre of Artisanal and Small-Scale Mining (ASM), of which 75 percent are illegal miners.
“As a result, the Mining and Quarrying sector accounted for just 9.12% growth to the Real GDP of the country in the fourth quarter of 2014, according to the Nigerian National Bureau of Statistics.
As recorded in our Collective Social Investment Report: Nigeria 2014, 89% of extractive companies, primarily in oil and gas, allegedly have a sustainability strategy framework. However, the report revealed that the extractive industries as a whole have the most impact on the environment, and that oil & gas production accounts for almost half of all emissions (McKinsey, 2010). This informs the pressure that is generally placed on the sector to give back to the earth and society.
“Six years ago in 2012, CSR-in-Action started one of our flagship advocacy programs, the Sustainability in the Extractive Industries (SITEI) Conference, with the Deputy High Commission of Canada. We envisioned a platform that would bring together the key drivers from the private and public sectors to leapfrog the economy of Nigeria. This year’s SITEI Conference, with the theme “Building Local for Global”, is to facilitate thought leadership amongst the key stakeholders in order to build our local refineries and mines and develop indigenous entrepreneurs not only for national development, but to achieve global competitiveness. The goal is also to position extractive stakeholders especially the indigenous companies, to understand the present dynamics in the sector, identify new hotspots, develop new strategies, and ultimately reap
maximally from the present-day extractive sector reality”, she explained.