A report on the frequent raiding of the Solid Minerals Development Fund reflects a serial pattern of corruption and misuse of special funds by successive Nigerian governments. Battered by the fluctuations in the global oil market, the country has missed another opportunity to utilise the fund to achieve its goals of diversifying revenue sources and wean itself from over-reliance on petrodollars. A report in The PUNCH revealing how the Federal Government has turned the over N1 trillion SMDF set up to develop the solid minerals sector to a ‘slush’ fund should jolt the government to act and faithfully deploy it for its intended purpose.
Set up by the Olusegun Obasanjo administration via an Executive Order in 2002, the fund was designed to help develop alternative mineral resources to lessen the nation’s dependence on petroleum, boost export revenues and drive local industrialisation.
Total accruals between 2002 and 2012 were N873 billion, while utilisation stood at N701 billion, leaving a balance of N172 billion at the end of 2012. Between 2013 and 2014, N159.6 billion was contributed to the fund, with outstanding balance at N350 billion.
The PUNCH report however indicates that N738.7 billion, and $3 million had been illegally disbursed from the fund for extraneous expenses, including the 2015 elections, the African Nations Cup, and “roads and drainage rehabilitation” in some states. These are brazen violations of the law.
It gets even more ridiculous. A House of Representatives Ad Hoc Committee in 2017 found that the government raided the fund to pay a former President, Goodluck Jonathan, and his deputy, Namadi Sambo, N1.5 billion as “exit package” in May 2015. It further discovered that all the past presidents, including the incumbent, Major General Muhammadu Buhari (retd.), regularly granted approvals to withdraw from it and spend on activities outside the core mandate of the fund.
The report recommended that “the National Assembly should put in place all necessary measures to recover the sum of N738.7 billion plus $3 million disbursed from 2002-2019 from the Development of Natural Resources Fund.” This is an absolute minimum.
Ironically, no action seems to have been taken to recover the diverted funds over four years after the probe. The prodigal misuse of the fund is a grave indictment of the government and highlights the negligence of the parliament. A primary responsibility of a parliament is to look after public money, jealously guarding its right to levy taxes and authorise expenditure. So, beyond conducting endless inquiries, the NASS should wield its constitutional power more effectively. Accountability must be enforced. It can refuse to pass budgets, decline loan requests, or decline to confirm presidential nominees to compel adherence to the law.
Nigeria is endowed with many mineral types, including crude oil, gas, bitumen, marble, gypsum, lithium, silver, granite, gold, gemstones, bentonite, iron ore and talc. The Raw Materials Research and Development Council has long prepared 44 mineral types for exploitation. But the Federal Government has been lukewarm in attracting investment, engaging in serial policy somersaults to the dismay of reputable investors who have since kept away. Frustratingly, the 36 states that all host some mineral types, have been negligent in taking up the challenge to drive their development, instead entrenching their addiction to the beggarly sharing from the Federation Account.
With Nigeria tottering under the burden of local and foreign debts, a vibrant mining sector is invaluable to unyoke the nation from the need for ruinous loans and joblessness. Largely underdeveloped, it contributes only 0.3 per cent to GDP. The National Bureau of Statistics says its contribution increased to N1.38 billion in the third quarter of 2021, from N1.23 billion in Q2. In Australia, the mining industry’s GDP increased by 4.9 per cent in 2019-20 and totalled $202 billion. Australia’s Bureau of Statistics says mining is the country’s largest industry with a 10.4 per cent share of the economy. South Africa’s mining industry contributed 22 per cent to the country’s GDP and employed over 760,000 people. Mining provides 41 per cent of Ghana’s exports.
As noted by PwC, one major hindrance to the development of the Nigerian mining sector is the failure to consolidate the achievements of ongoing projects already initiated by the previous governments. The global consultancy also identified inability to establish worthy collateral for intending financiers as major challenges experienced by miners, as well as poor road and rail linkage to mining sites.
Nigeria’s mining roadmap unveiled in 2016 targets raising its contribution to GDP to 3.0 per cent, or $27 billion by 2025, from the meagre $256 million it contributed in 2020. The government should aggressively implement the roadmap. The full potential of the Presidential Artisanal Gold Mining Development Initiative could be helpful in achieving this.
A single-minded pursuit of PAGMI and its target of creating over 500,000 new mining and formalised jobs is realisable in the long term. A World Bank report in May 2020 said that the production of minerals, such as graphite, lithium, and cobalt, could increase by nearly 500 per cent by 2050, to meet the growing demand for clean energy technologies. The report revealed that some minerals like copper and molybdenum will be used in a range of technologies; and others such as graphite and lithium, for battery storage. This presents a golden opportunity for Nigeria to take full advantage of the expected rise in global demand for minerals as the world transitions to clean energy technology deployments.
In the current global context where COVID-19 is causing major disruptions to the global economy and is thrashing the economies of oil-dependent countries like Nigeria, it is, therefore, incumbent on the government to make the development of the mining sector an urgent cardinal goal.
The NASS should not sweep this brigandage under the carpet. The government’s lawlessness should be reined in. In the past, the Petroleum Trust Development Fund and the Ecological Fund were similarly serially raided with impunity with no consequences for the culprits. The SMDF should be the last episode of such official malfeasance.
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