forecasts $500m yearly earnings from royalties, taxes
President Muhammadu Buhari has decried that Nigeria lost close to $3b from 2012 – 2018 due to illegal smuggling of gold.
He spoke yesterday during the official presentation of locally mined gold bars by the Presidential Artisanal Gold Mining Development Initiative (PAGMDI) at the Presidential Villa, Abuja.
The president, who restated the determination of his administration to combat illegal mining activities, said improved gold mining operations in the country would generate no fewer than 250,000 jobs and over $500m annually in royalties and taxes to the Federal Government.
He said this laudable initiative would support efforts at creating jobs for Nigerians, diversifying the revenue base, and improving foreign exchange reserves.
President Buhari noted that in addition to the potential revenue gains that will occur from mining operations, efforts are being made to enable the setting up of gold refineries in Nigeria.
“With the implementation of the PAGDMI scheme which will result in the set-up of accredited gold buying centres across key mining areas, artisanal miners and SMEs engaged in mining will be able to capture the value of their work.
“These operations will help in diversifying our revenue base. The sale of gold by artisanal miners and SMEs at accredited centers will help the government in realizing royalties and taxes from the sale of these assets.
“These developments will also help in improving our foreign reserves by enabling the Central Bank of Nigeria to increase the amount of gold in its reserves.
“These gold assets which will be purchased in Naira, will not only help to bolster our international reserves, it will also provide a hedge against inflation and other economic volatilities associated with foreign currencies that are held in our reserves,” the President said in a statement issued by his spokesman, Femi Adesina.
He also expressed optimism that these measures would lead to the creation of additional job opportunities across the gold value chain and also help the nation capture the additional value created from the gold refining processes.
Buhari, while speaking on environmental degradation, promised that government would pay close attention to safety and environmental measures to protect workers and the environment.
He lauded all stakeholders involved in the PAGMI for their painstaking efforts in developing a programme aimed at improved sourcing and refining of high-quality gold bars, derived from minefields in Nigeria.
The President recalled that the PAGMI, which was launched in 2019, was well timed, considering the impact of COVID-19 on the global economy and indeed on the Nigerian economy.
He said the impact of COVID-19 and the containment measures designed to slow the spread of the virus had led to a slowdown in global growth, which is projected to decline into negative territory for the first time since the Great Depression.
“It has also led to a 40 percent drop in crude oil prices. In Nigeria, the drop in crude oil prices has had a significant impact on government revenue, as well as on our foreign exchange earnings.
“In responding to this challenge, it is therefore paramount that we strengthen our efforts at implementing policies and programs that will enable greater diversification of the Nigerian economy.
“Enabling investment in the Solid Mineral sector, is a key part of the government’s economic diversification program.
“Given our current estimated gold reserves of over 200m ounces, most of which have not been exploited, developing sustainable programmes that will catalyse increased investment in the extraction and refining of gold sourced from mines in Nigeria, is indeed vital,” he said.
The President while stressing the benefits of the PAGMDI, explained that it will support job creation efforts particularly for artisanal miners, by providing them with a guaranteed off-take by the Central Bank of Nigeria.
He said efforts are also being made to support artisanal miners in improving the standard of the gold that will be sold to the apex bank in order to ensure that they meet international benchmarks.
According to him, the initiative will enable the deployment of financing schemes that will help miners improve on the quality of their mining operations.
In Zamfara State, Daily Trust investigations showed that illegal mining activities had been going on for a long time as youths from within and outside the state usually flood the gold mines for incomes.
Speaking on the magnitude of the problem, Aliyu Kerewa, who is familiar with the mining activities, said: “You will find some of them in mining fields like Duza in Anka local government or Kwali in Bukuyyum or many other goldmines in Maru and Maradun local government areas”
“I think they have an extensive network of miners and they do it in collaboration with other foreign nationals especially the Burkinabes. Those from Burkina Faso are more in number than any other foreigners here.”
Speaking after the official presentation of locally mined gold bars by the PAGMI, Governor Atiku Bagudu of Kebbi State, said gold mining activities were attracting criminals because they produce precious materials that are easy to transport across various locations.
Bagudu, while reacting to a question on the impacts of this new initiative on security in the North West geo-political zone, said that with the launch of PAGMI and the formalization of the activities of illegal miners, it would have a significant effect on insecurity in places of the country, where mineral production, including gold, was taking place.
In Kebbi State, a source close to Kebbi State Government, who spoke on condition of anonymity, told Daily Trust that illegal mining had been rampant in the state but that as part of the ongoing registration of the artisanal miners in the state, about 15,000 miners had so far been registered.
To assist them, he said government had been provided with modern equipment for mining activities in Zuru, Fakai, Danko-Wasagu, Sakaba, Yauri, Shanga, Ngaski and Bagudo local government areas.
Similarly, Plateau State has one of the highest rates of illegal mining in the country, despite efforts to tackle the menace by the authorities.
The gravity of the activities was captured in 2016, when the then Minister of Solid Minerals Development and now Ekiti State Governor, Kayode Fayemi, said the Federal Government was worried over the rate of illegal mining activities in Plateau State, describing it as unsafe and unhealthy for the nation.
The Minister of Mines and Steel Development, Olamilekan Adegbite, said government was tackling the activities of illegal foreign miners, who created instability to have unfettered access to gold.
The minister, who spoke on the significance of the official presentation of locally mined gold bars to the President by PAGMI, said: “We have just celebrated something that is quite unique in the history of the country. We have generated an FBA standard gold bar, the bullion bar from gold that is mined responsibly in Nigeria. This is a watershed for the country.
Miners’ group sets loss-preventive agenda for govt
Speaking on the ugly development and the way to reverse it, President of Miners Association of Nigeria, Alh Kabiru Kankara, expressed surprise about the huge yearly losses and charged the government to adopt appropriate legislative and other measures to curb illegal mining activities and the associated losses to the economy.
He said: “I am not surprised that the amount of money being lost is that much but there are a lot of things that can be put in place to curtail that kind economic sabotage.
“One, we have to look at how we can organise the artisanal miners into making it a formalised body in a way that we can create a central market that is controlled by a body.
“Secondly, there should be a situation that Miners are organised into a single body. Miners Association of Nigeria is supposed to be a central body so that if you are a miner or if you are into the selling of mined product, you should be part of the membership”, Kankara added.
Daily Trust