The dearth of huge investments in the solid minerals sector has been largely attributed to the lack or absence of foreign investors and investments, which is the financial backbone of any free market economy. Ruth Tene looks at the many challenges facing the sector.
Investment, according to the Merriam Webster’s dictionary, is defined as the outlay of money usually for income or profit, or the sum invested on a property purchased with the intent of gaining profit, while foreign investments are the money contributed by other organisations, countries or persons other than the owners of the project to develop a particular project.
Looking at the solid minerals sector today, Nigeria has been described over time as one of the richest in the area of solid minerals resources, with the availability of natural minerals in almost every State of the federation while some States have multiple mineral products.
Despite these, the sector remains the most neglected, and in fact one of the most moribund sectors with the contribution of a little below 1 per cent to the GDP of the economy, making it of no relevance to economic development.
This should not be so, considering the sector’s potentials for economic growth, wealth creation, poverty alleviation and job creation.
Findings revealed that the sector suffers lack of investments from both government, private and even foreign investors. This is obvious from the budgetary allocation of less than N4 billion for both its capital and recurrent expenditures in the 2012 budget by the federal government, making it less attractive for foreign investors.
In a recent interview with the Minister of Mines and Steel Development, Mohammed Sada, he said investors all over the world invest for profit and they analyse the security of their investments.
He said that prior to now, the excuses of investors were the lack of complete set of rules guiding the sector , saying they could not invests in a sector not properly governed by rules, but with the completion of the mining regulations, that aspect has been taken care of, the solid minerals sector now has a mining regulation.
Another thing, Sada said was that “Local miners found it difficult to invest and construct roads to the mines as the burden was too big for them.” But realistically, should the construction of roads be left to miners or should it be a government responsibility, considering that mining shafts were usually off beaten tracks and usually secluded from communities and dwellings?”
The insecurity situation in the country is a hindrance too, because when something happens the news is circulated all over the world which is a global village. So this is also an impediment to foreign investors who wish to invest in the sector.These and many more are the challenges facing investors in the sector,” he said
The Managing Director of SCC, Levy Yuval, a foreign investor who has spent over 20 years in Nigeria investing in the construction and the solid mineral sector said, “Nigeria has lots of challenges facing investors in the sector, chief among which is the nations over dependence on oil, which leads to the neglect of other sectors of the economy, including the solid minerals sector”.
The Managing Director of Royalty Salt, Sunil Pillai, who also spoke in an exclusive interview with LEADERSHIP, was of the opinion that infrastructures such as good roads, power, environment and ecological degradation, which have taken place as a result of illegal mining, were major challenges to investors in the sector