Minister of finance, budget and national planning, Zainab Ahmed, has said the Nigerian capital market is a catalyst for the development of the critical sectors of the economy as it poses a credible platform for obtaining medium to long-term finance.
Ahmed made the remark during a webinar with the theme, “Financing the Solid Minerals Sector through the Capital Market and the Critical Role of Commodity Exchanges,” yesterday.
Ahmed explained that the facilitation of funding and provision of structured market platforms such as the commodities exchanges portend significant addition for the mining and solid minerals sector, saying that the event and its theme are very relevant to the economy given the need to diversify and grow the economy and to enable the nation achieve sustainable development in the post covid-19 pandemic.
According to her, “Given the economic challenges occasioned by the Covid-19 pandemic, the ongoing efforts of the federal government to achieve economic diversification has been affected by a decline in revenue, underlined by volatility in global oil prices which is our main source of foreign exchange earnings.
“The mining sector is strategically based as an alternative source of revenue generation in the economic diversification plan of the federal government of Nigeria. It also has the potential to create employment and develop rural settings for other benefits.
“The mineral export guidelines by the federal government was formulated to address the need to keep accurately mineral trade data, ensure effective monitoring of the evacuation of export proceeds, to optimise the collection of royalties, and facilitate the implementation of free shipment inspection policies of government on each export transaction, as this is international best practice in line with the Marrakesh Protocol of GATT 1994.”
Ahmed noted that the initiative of employing the commodities exchange in this regard would encourage responsible accounting and fairness.
This and other initiatives she further said would help to facilitate the collection of all royalty and fees due to the government from the export of solid minerals, ensuring the integrity of the mining data, minimising revenue leakages and removing undue bottlenecks experienced with transactions by both exporters of minerals as well as our regulatory agencies.
“Identified as one of the frontiers of opportunities in the new economic reality, the Nigerian commodity trading ecosystem serves as the core point which supports and accelerates the development of non-oil commodities, which will be complemented by ongoing efforts to diversify the national economy.
“Inefficient linkages of buyers and sellers in sufficient schemes will possess the capacity to proffer solutions to some of the fundamental challenges inherent in the mining sector.
“Streamlining the operations of the mining sector therefore through the commodities trading ecosystem and through other initiatives will ensure proper regulation of the solid minerals extracting industry in Nigeria. I am positive that the outcome of this webinar and the strategic partnership between the mining sector and the capital market community will enhance the competitiveness of our new non-oil commodities and compliment the economic diversification of the Federal Government” She stated.
In a welcome address, director general of SEC, Mr. Lamido Yuguda, said with over 44 minerals found across the federation, the solid minerals sector can be significantly instrumental in the on-going quest to diversify the economy from its heavy reliance on crude oil.
Yuguda said it has also been identified as a backbone of the investor value chain which is an essential source of input for key industries such as construction, automobiles, electronics, aircraft and ship building.
He said: “We believe that the Nigerian Commodity trading system and indeed the capital market can be the transformational patronage to bring about this positive changes in the sector.
“With opportunities provided for better access to marketing of produce, price discovery and valuable market information, a striving commodities trading ecosystem has the potential to foster inclusive mining prosperity by efficiently linking commodities to industries in sufficient scale thereby promoting the output, creating jobs, improving living standards and unlocking the economic potentials of mining communities.
“It will also enhance financial inclusion of artisan miners, foster mineral production, stimulate exports and ultimately engendered economic development amongst other benefits. Undoubtedly, greater connectivity of the mining sector and the commodities trading ecosystem will ensure that mineral commodities could be traded on transparent, efficient and organised trading platforms provided by commodity exchanges”.