By Adewale Sanyaolu
As part of strategies to halt hostilities and promote genuine indigenous participation in oil and gas contracts, the Nigerian Content Development and Monitoring Board (NCDMB) says it has concluded plans to develop a policy on community content.
Executive Secretary of NCDMB, Engr. Simbi Wabote, disclosed this at the 2016 Nigerian Gas Association (NGA) International Gas Conference and Exhibition, which ended in Abuja last week.
Wabote, pledged to integrate community contractors in ancillary activities supporting the oil and gas industry.
He, however, challenged Petroleum Technology Association of Nigeria(PETAN) members to articulate a sustainable community content strategy that would facilitate the participation of genuine community contractors in oil and gas projects so as to promote peace and tranquillity in oil producing communities.
According to him, Nigerian content activities must go beyond the project phase and extend through the life cycle of projects.
In a similar vein, Wabote said review of tenders and other approvals by NCDMB will now be executed on strict timelines as part of new measures to shorten the protracted contracting cycle in the oil and gas industry and revitalize the implementation of Nigerian Content.
The Executive Secretary hinted that the Board would introduce speed and simplicity into its approval processes to ensure that Nigerian Content reviews and approvals do not delay the execution of projects and not escalate the cost of crude oil production.
“We will strike a balance; we will not stop reviewing tenders but we will also ensure that projects are executed speedily, Nigerians benefit and there are in-country value additions,” he said.
While commending past Executive Secretaries of the Board for the achievements they recorded while on the saddle, Wabote stated that NCDMB would begin to review its performance since the enactment of the Nigerian Content Act in 2010 and to set agenda for local content value addition in the next five years.
He noted that the Board would adopt a pragmatic approach adding that “our strategy will take into account the current realities in the industry, the job creation drive of the Federal Government and national aspirations for the oil and gas industry provided in the 7 Big wins document launched by Mr. President.”
Speaking further, Wabote charged industry stakeholders, local service providers, particularly members of PETAN to embrace proposals for longer contract tenure of at least five years to support the reduction of the contracting cycle, capacity building and asset acquisition.
On his part, Chairman of PETAN, Mr. Bank-Anthony Okoroafor charged the Board to speed up the lending from the Nigerian Content Fund (NCDF) to deserving service companies in support of in-country value addition while calling for the abolition of call-off contracts.
Recession: Building strong economy on solid minerals
From Uche Usim, Abuja
Before crude oil was discovered in Oloibiri, Niger Delta region on January 15, 1956, Nigeria’s economy was anchored on solid minerals’ export and agriculture.
Available records show solid minerals contributed hugely to Nigeria’s Gross Domestic Product (GDP). The exploitation of different solid minerals deposits in commercial quantities in various states of the federation guaranteed jobs and yielded enormous revenue in taxes and royalties.
According to the Nigerian Extractive Industries and Transparency Initiative (NEITI), there are about 40 different kinds of solid minerals and precious metals buried in the bellies the Sahel and mangrove regions waiting to be exploited. Only recently, nickel, a rare but expensive jewel was discovered in Dangoma, a small farming community in Kaduna State by a team of experts headed by the Australian mining industry veteran, Hugh Morgan, has swelled this list of Nigeria’s precious solid minerals. A few of the key mineral deposits in the country include tin, iron ore, coal, bauxite, columbite, limestone, gold, gypsum, kaolin, lead, zinc and bitumen.
The Nigerian Investment Promotion Commission (NIPC), describes the mining and solid minerals sector as one that offers a viable alternative to petroleum for foreign exchange earnings.
It pointed out that on the global scene, the mining sector closely rivals the petroleum industry but Nigeria has not fully explored its potential, as it earns a paltry $89 million annually from it.
NEITI’s records also reveal that the solid minerals sector contributed only N113 billion to the nation’s coffers in five years.
These statistics show that the commercial value of Nigeria’s solid minerals has been estimated to run into hundreds of trillions of dollars, with 70 per cent of the minerals lying in the bowels of northern Nigeria.
As staggering as the figures are, economic analysts are worried that the discovery of oil in commercial quantities by Shell BP has panned government’s attention away from mining to petroleum in what they say became the curse of Nigeria’s economy.
According to them, the harvest of huge revenues in foreign exchange from oil for several decades has put mining at the bottom of government’s economic priority such that it now contributes less than 0.3 per cent to the GDP.
However, with the crash of crude oil prices globally and the attendant loss of huge revenue in foreign exchange by oil exporting countries, Nigeria’s economy slipped into recession because oil, it’s live wire, had abysmally dropped in value.
Confronted with the harsh reality that dwindling revenues from crude oil can no longer fund the nation’s fat budget, the Buhari administration has been forced to think outside the box by embracing economic diversification. That journey entails reviving the hitherto moribund mining sector.
But for government to fully realise the potential in mining, experts say there is an urgent need to amend existing laws, dismantle all bureaucratic bottlenecks laced on investors’ paths as they seek operational licenses and strong private sector partnership.
Solid Minerals Minister, Dr. Kayode Fayemi, has championed the campaign of using his sector to buoy the nation’s economy, as he insists the country could earn as much as N5 trillion annually if the right investments are made.
“You have heard all sorts of talks about how rich Nigeria is in mineral resources, but the quantity, quality and prospecting have been a challenge because we have neglected the sector for such a long time,” Fayemi said in a recent chat with State House correspondents in Abuja.
The Minister said the Federal Government plans to invest on exploration and research, adding that the ministry was already in negotiation with the Sovereign Wealth Fund (SWF) and the Nigerian Stock Exchange (NSE) to access private capital for mining.
He confirmed that the government was already working out guidelines for successful implementation of the plan and the disbursement of the funds.
Fayemi explained that there was need to upgrade geological data in the sector if the country is to attract investors into the country as it obtains in countries like Ghana, Burkina Faso and Côte d’Ivoire where an average of $300 million was spent yearly on exploration.
According to him, Canada, Australia and South Africa, among other countries, had explored such windows to meet their economic needs and advised states to work with willing private sector investors to grow the sector.
The Minister’s investment outlines elicited positive reactions as Alhaji Sani Shehu, President, Miners Association of Nigeria (MAN), expressed optimism that the mining sector was about to regain its lost glory if the government backed its words with actions.
While admitting that the mining sector had the potential for massive job creation and higher revenue yielding potential through exports, he lamented that majority of Nigerian miners were artisanal small scale operators who conduct explorations of minerals without the required machinery.
Shehu welcomed the Federal Government’s nod for states with solid mineral deposits in commercial quantities to exploit same.
In dealing with the problem of illegal and substandard mining, Malam Mohammed Amate, the Director General, Nigeria Mining Cadastre Office, revealed that the Federal Government, through his office, planned to revoke 500 mining licences out of the 1,400 issued in 2015.
He noted that some licensed companies were docile, while others operated outside the relevant sections of the nation’s mining laws.
His words: “Some of them got mining licenses for mineral exploration but embarked on extracting minerals; these are two different things,’’ he said.
Amate noted that the Federal Government’s new mining policies automatically weed out mediocre mining companies and replaced them with serious ones.
He revealed that the government had activated better monitoring and evaluation mechanisms to ensure that the mining sector generates the expected returns through higher taxes, rates, royalties and employment.
Already, some states’ commissioners for mineral resources have applauded the government’s initiatives to improve the mining sector, with Abdullahi Abbas, of Plateau State, describing it as a springboard for huge economic development.
Hear him: “The solid mineral sector used to be in the exclusive legislative list; now that it is on the concurrent list, we shall take full advantage of it to widen our scope in the search for more alternative revenue sources.
“I have visited some of the mining companies and even signed development agreements among some companies and the host communities, but one area that I find unacceptable is the fact that most of the employees are foreigners.
“The law says that 70 per cent of the workforce should be from the host communities but I have found that 95 per cent of the workers are foreigners; this is certainly not good for the state.
“Now that we have the backing of the Federal Government, we shall insist that the right thing is done in the area of employment, royalties and taxes,’’ he said.
For Katsina State Governor, Aminu Masari, the state’s administration would pay special attention to policies and strategies that would address challenges faced by Small and Medium Enterprises (SMEs) in the mining sector.
While speaking at a recent stakeholders’ conference to strengthen the capacity to manage the mining and development of solid minerals, he said, “we are aware that deep-rooted shortcomings in the design and implementations of key policies have effectively left mines operators to supervise themselves.
“This has fuelled pervasive lawlessness in the mining activities and constituted serious environmental harm to mining communities; we must take steps to check such harms while maximising the potential of the mining sector.”
While the government eyes huge revenue from mining, Mr. Kalu Iroakazi Kalu, an environmentalist, has called for environmental impact assessment test of the host communities before any mining activity to reduce environmental hazards.
He argues that the use of safety devices such as ear muffs, safety boots, safety glasses and helmets should be encouraged to protect those on mining fields.
“Mining activities are associated with environmental hazards including the destruction of the ecosystem, air and water pollution in case of coal mining and solid waste disposal problem.
“But these hazards can be reduced when environmental impact assessment is carried out before the beginning of mining activities. Environmental impact assessment ensures that the hazards are identified and measures put in place to reduce their effect on the environment,’’ he said.