Commercial quality mineral resources abound in Nigeria but that’s not the issue here. While it’s true Nigeria has been blessed with grand quantities of gold, diamonds, iron ore, a variety of gemstones and lead, among others, find the technical expertise and financial savvy to take advantage of the resources has long plagued the region.
The Federal Gov’t of Nigeria is the custodian of the mineral resources on behalf of the citizenry and they are taking steps to make the resources more lucrative than before but investors have long been weary of sending their money to an area known for its political instability.
In decades past, the government granted mineral rights to investors so they could explore, mine and get the minerals to market but the gov’t preferred to act as an owner-operator. This micro-management methodology on the investor’s dime has long been a major detractor to investors who want to have full control of how their dollars are used and profited from.
Now that the Nigerian gov’t is taking on more of an administrator/regulator role, the investors are coming back. To make the market for Nigerian mining more competitive, they have adopted a First-come, first-serve basis for investors.
In an effort to encourage foreign investments, the Ministry of Solid Minerals Development has added incentives such as a three-year tax moratorium for new mining interests which can be extended for an additional two years. Furthermore, mining interests can be granted exemptions from import and export duties in exchange for implementing tunneling and drilling equipment, mining machinery, and accessories.
Mineral title holders are guaranteed transfer of funds, for free, via the Central Bank of Nigeria and are also granted permission to keep a portion of their foreign exchange monies in a private foreign exchange account to be used for purchasing spare parts and other resources needed to maintain mining operations; funds that wouldn’t necessarily be readily available without digging into company coffers.
But Nigerian mining officials aren’t only keeping an eye on just mining operations, they want to take mining in their region to an entirely different level. Investors are also being sought to help build a robust mining industry by way of promoting ancillary mining businesses such as equipment manufacturers, mineral testing and quality firms and quality control organizations.
it seems that the mining industry is set to explode in Nigeria, especially when the gov’t is taking a closer look at developing the industry so that it can operate independently. By taking comprehensive steps to ensure that mining becomes more of an export-only affair, Nigeria hopes to eventually be like the more developed nations that don’t need outside help to exploit resources of any kind.
By taking on investors now and in the near future, Nigeria is positioning itself to be a global player in the mining, processing and exporting industry instead of relying on other nations, who have their own agenda. If it works as planned, other countries on the African continent can start planning their own operations, knowing that eventually, the profits will stay in-country instead what’s been going for centuries: pillaging the resources of Africa with no lasting or long-term benefit to its citizens.
By Tobi Bamidele
Tobi Bamidele is a marketing consultant who has been published on some of the world’s biggest blogs, including Under30CEO, Tech.co and Social Media Today.