Nigeria loses N353bn to illegal gold mining in three years, IYC, Bayelsa kick

Nigeria lost about N353bn in gold smuggled out of the country
and sold in the international market between 2016 and 2018 without
any revenue accruing to the government. However, illegal miners
reaped the gain, investigation has shown.

Within the three-year period, about 18 tonnes of gold were
smuggled out of the country and sold in the international market as
confirmed by the Minister of Mines and Steel Development, Alhaji
Bawa Bwari.

Bwari, in a document, ‘Three Years Accounts of Stewardship,’
confirmed that although six tonnes of gold originating from Nigeria
were traded in the international market on an annual basis, the
trade did not benefit the country as it made no impact on the
nation’s Gross Domestic Product.

The minister said, “From the NEITI audits and reports from
international sources, about six tonnes of Nigeria’s gold have been
traded in the international market, yearly, since 2016; with no
impact on the economy or the national GDP. The recent seizures of
gold by the security agencies, at our airports buttress this
fact.”

Economic info graphic portal,
demonocracy.info/infographics/world/gold/gold.html, gives the worth
of one tonne of gold as $64.3m at $2000/oz.

This means that within three years, 18 tonnes of gold frittered
from the country are worth $1.16bn. At the official exchange rate
of N305/$, this gives N353bn as the value of gold that illegal
miners and smugglers shared without any impact on the country’s
GDP.

To reverse the trend, Bwari said the Federal Government had
evolved a new draft policy that was intended to reorganise the
country’s gold value chain and bring benefits to the country.

The policy would see the Central Bank of Nigeria buying gold
produced in the country. This is aimed at not only encouraging
local production but also at brining transparency in the otherwise
opaque trade and ensuring that the Federal Government gets its due
in taxes.

Large gold reserves of countries are usually held by apex banks.
In the past, currencies issued by the bank of last resort were
backed by gold reserves. Perhaps, this policy would bring back the
culture of banking gold for the country by the CBN.

The minister said, “After carefully considering the role
precious metals and minerals play in the economy of nations, this
administration found it expedient to reorganise the gold sector
without delay.

“The ministry has developed a draft gold policy that would
facilitate the development of the entire gold value chain. This is
aimed at eliciting formal gold production, regulated trade and
documented exports and to check the irregularity in the sector that
has caused huge losses to the national economy.

“It will also stem the prevalence of unhealthy working
conditions and smuggling, which inhibit collection of royalties,
fees and taxes.”

He added, “The primary aim of the scheme is to promote the
production, aggregation and refining of Nigerian gold, for purchase
by the Central Bank of Nigeria.

“The approval for the development and implementation of the
scheme by the Solid Minerals Development Fund was one of the major
outcomes of the Economic Recovery and Growth Plan Focus Labs.”

According to Bwari, the National Gold Purchase Scheme will be
deployed under two platforms.

The first is the Public Sector Window, which involves the
production of gold by registered artisans under a model integrated
gold production system, operated by an SMDF Special Purpose
Vehicle. This direct intervention is planned for Kebbi, Zamfara,
Niger, Osun and Kaduna states.

The second is the Private Sector Window, which involves the
provision of access to equipment through a lease/hire-purchase loan
facility for Artisanal and Small-Scale Gold Miners, who would be
grouped into clusters for easy administration.

The CBN is expected to be the anchor, as final off-taker, of the
certified London Bullion Market Association gold bars produced
through the scheme, under a Federal Gold Reserve Treasury
Scheme.

Making projections, the minister said the scheme would guarantee
the formal employment of 50 per cent of 110,000 artisanal gold
mining workforce.

An estimated 250,000 more jobs would be created, by extension,
in other sectors that will service the organised gold supply chain,
he said, putting the projected production at 175,000 ounces (5,469
kilogrammes) of refined gold bullion, in the first year.

Bwari said with the programme, projected earnings in the gold
sub-sector would increase by N53bn and boost the solid minerals
sector’s contribution to the national GDP by 80 per cent.

The Federal Government had on April 7 suspended mining in
Zamfara State as part of efforts to curtail the activities of
bandits.

Zamfara not benefiting from gold mining –
Commissioner

Investigations by one of our correspondents at the mining sites
in Zamfara showed that the miners were operating illegally.

The PUNCH learnt that none of the mining lease holders operating
in the state engaged in full scale mining activities.

Most of the title holders, it was gathered, hid under small
leases to engage in crude mining. They later leased their remaining
areas out to small scale miners who wreaked havoc on the
environment.

Zamfara State Commissioner for Environment, Mouktar Lugga, who
corroborated this in an interview with one of our correspondents,
stated that of all the exploration licences granted, an
insignificant percentage was utilised properly.

“Of all the exploration licences granted, I seriously doubt if
15 per cent is being utilised properly.

“Let not forget that mining is on the exclusive list of the
Federal Government. It is only the Federal Government that can
issue licence to mining operators.

“It is when the Federal Government starts deriving revenue that
Zamfara will start benefiting. When the sector is not properly
organised and standardised for the Federal Government to generate
revenue, how would the state benefit?

“Zamfara solid minerals sector unfortunately is still
underdeveloped, unexplored and grossly untapped,” he lamented.

He went further to fault what he described as an outrageous and
inflated figure quoted by a former Minister of Finance as amount
lost annually through illegal exploration of gold in the state.

Mouktar said, “I recall a former Minister of Finance, Dr Ngozi
Okonjo Iweala, once made the assertion that Nigeria loses over
$500m per annum through illegal exploration of gold from
Zamfara.

“That figure is grossly inflated and is not commensurate to what
I saw on the ground because; we don’t have full mining operation in
Zamfara.

“To be honest, besides budgetary reasons, I doubt if there is
indeed enough justification for the bogus statistical data that is
usually ascribed to this budding sector.”

To curb the environmental degradation illegal mining was
causing, the commissioner explained that the state government
encouraged the miners to come together and form cooperative
groups.

“By this, they would be recognised. The government will create
an enabling mining environment for them, help them with safety
equipment and ensure all their benefits from the centre get to
them,” the commissioner said.

But stakeholders in the oil-rich Niger Delta condemned the
Federal Government’s emphasis on petroleum, while allowing
individuals to benefit from gold mining in the North.

FG’s attitude reckless, irresponsible, say Bayelsa
govt

On its part, the Bayelsa State Government described the attitude
of the Federal Government towards the Niger Delta people despite
contributing over 90 per cent of the nation’s resources as reckless
and irresponsible.

The government was reacting to government unwillingness to give
a clear-cut policy on gold mining, which from indications, was
profiting individual illegal gold miners from the North.

Speaking on behalf of the state government, the Commissioner for
Information and Orientation, Daniel Iworiso-Martins, said Bayelsa
and the Niger Delta had suffered vast environmental and human
damage despite their contributions to the socio-economic growth of
the country.

He stated, “For a state that produces 40 per cent of Nigeria’s
oil wealth and being host to the operations of all the major
multinational oil companies, the state has suffered unduly as the
government and oil companies operating in the state have for
decades acted with impunity and with little regard for the
environment and the people.

“Their attitude considered reckless and irresponsible has caused
multiple oil spills leading to environmental degradation and loss
of lives.”

FG lacks political will to implement mining because of
vested interest – IYC

Also, the Ijaw Youth Council said the Federal Government lacked
the political will to implement the gold mining policy because of
some vested interests.

Its President, Eric Omare, was responding to the issue of
illegal gold mining in Nigeria.

He said, “Firstly, there is a law which generally regulates
mining in Nigeria including gold which is the Minerals and Mining
Law of Nigeria, Cap M12 Laws of the Federation of Nigeria.

“So, the issue is not as if the Federal Government has no policy
on gold mining but the lack of political will to implement the law
because of some vested interests.

“I think that the reason the Federal Government is unable to
implement the law on mining may be because the individuals involved
are politically and economically connected people.”

Culled from Punch