Economy
Mining Sector to Contribute $27b to GDP by 2025—FG
By Modupe Gbadeyanka
It is no doubt that a lot has not been tapped from the mining industry in Nigeria, but the present government is focusing its attention to this just as it is doing with the agricultural sector.
At the moment, it is estimated that the contribution of the sector to the Gross Domestic Product (GDP) of Nigeria is $13 billion.
But the Ministry of Mines and Steel Development says it hopes to push this to about $27 billion by 2025.
This was revealed in the Ministry’s Road Map released on Sunday in Abuja, which was posted on its website and analysed by Business Post.
According to the Ministry’s roadmap, the impact on GDP will be significant as industries are able to use the output of the sector better, substituting for imports.
It also noted that the successful execution of the mining plan with unlock significant value for Nigeria and the net outcome will be creation of thousands of direct jobs and potentially hundreds of thousands of indirect jobs.
The Ministry said it would execute this roadmap in stages with the first focused on bringing stability to the sector and rebuilding the country’s market confidence between 2016 and 2018.
The second phase will focus on establishing Nigeria as a competitive African mining and mineral processing centre from 2016 to 2020, while the third phase will enable Nigeria compete in the global market for refined metals and minerals from 2018 to 2030 in addition to selected ore exportation.
“To ensure effective execution of the roadmap, a committee has recommended the formation of a Mining Implementation and Strategy Team (MIST) that will be the process owner of the roadmap and will be accountable for its implementation.
“MIST, as an advisory team to the Minister, will work across multiple MDAs, stakeholders and private institutions to ensure that the full potential of the minerals, mining and metals sector is achieved,” the Ministry said.
Recall that in 2015, the sector contributed approximately 0.33 percent to the GDP of the country. This contribution is a reversal from the historically higher percentages (about 4-5% in the 1960s-70s).
However, following a decade of reforms starting in 1999, this contribution represents a cautiously optimistic restart of the development of the sector.
The decade of reform saw key changes including, the passage of a new Nigerian Minerals and Mining Act (2007), a Nigerian Mineral and Metals Policy (2008), the creation of a modern Mining Cadastre system, the refinement of the tax code, and the expansion in airborne mapping of the country to sharpen knowledge of the mineral endowments. As important as these progress steps have been, Nigeria can and should do more.
The sector faces several challenges with geosciences data and information, Industry participants, Stakeholders, Institutions, Governance and other enablers of the sector.
According to the National Bureau of Statistics (NBS), gour sub-activities make up the Mining & Quarrying sector: Crude Petroleum and Natural Gas, Coal Mining, Metal ore and Quarrying and other Minerals.
On a nominal basis, the sector grew in the Fourth Quarter of 2016 by 54.68% (year on year). This was substantially above the growth rate recorded in the corresponding quarter of 2015, when a contraction of -35.12% was recorded.
This increase may be attributable in part to negotiations with militant groups in the Niger Delta region, who had been vandalizing oil infrastructure, but who reduced their attacks in the fourth quarter following these series of negotiations.
Coal mining and Metal ore activities in nominal terms, recorded growth rates of 14.16% and 24.24% respectively, significantly higher than the third quarter growth rates of 1.06% and 17.11% respectively.
The Mining & Quarrying sector contributed 7.10% to overall GDP during the fourth quarter of 2016, higher than the contribution recorded in same quarter of 2015 at 5.18%, and its contribution in the preceding quarter of 6.23%.
In real terms, Mining and Quarrying sector recorded a decline of -12.04% (year-on-year) in the fourth quarter of 2016. Although this is significantly smaller decline than that recorded in the previous quarter, of 21.64%, it is nevertheless 3.99% points lower than the growth rate recorded in the same Quarter of 2015 of –8.05.
The contribution of Mining and Quarrying to Real GDP in the fourth quarter of 2016 stood at 7.32%, representing a decline of 0.89% points relative to the corresponding quarter of 2015 and also a decline of 1.02% points relative to the third quarter of 2016.
By Adedapo Adesanya
The duo of Geo-Fluids Plc and Afriland Properties Plc propelled the NASD Over-the-Counter (OTC) Securities Exchange up 0.13 per cent on Friday, January 10.
Investors gained N1.4 billion during the trading session after the market capitalisation of the bourse ended at N1.053 trillion compared with the previous day’s N1.052 trillion, and the NASD Unlisted Security Index (NSI) increased at the close of business by 4.07 points to wrap the session at 3,073.93 points compared with 3,069.86 points recorded at the previous session.
Geo-Fluids added 25 Kobo to its value to close at N4.85 per unit compared with the previous session’s N4.60 per unit, and Afriland Properties Plc gained 24 Kobo to close at N16.25 per share versus Thursday’s closing price of N16.01 per share.
There was a 35.4 per cent fall in the volume of securities traded in the session as investors exchanged 4.3 million units compared to 6.6 million units traded in the preceding session, the value of shares traded yesterday went down by 37.4 per cent to N17.2 million from the N27.5 million recorded a day earlier, and the number of deals decreased by 47.2 per cent to 19 deals from the 36 deals recorded in the preceding day.
FrieslandCampina Wamco Nigeria Plc remained the most active stock by value (year-to-date) with 1.9 million units worth N74.2 million, followed by 11 Plc with 12,963 units valued at N3.2 million, and Industrial and General Insurance (IGI )Plc with 10.7 million units sold for N2.1 million.
IGI Plc closed the day as the most active stock by volume (year-to-date) with 10.6 million units sold for N2.1 million, trailed by FrieslandCampina Wamco Nigeria Plc with 1.9 million units valued at N74.2 million, and Acorn Petroleum Plc with 1.2 million units worth N1.9 million.
By Adedapo Adesanya
The Naira witnessed a depreciation on the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Friday, January 10.
According to data from the FMDQ Exchange, the local currency weakened against the greenback yesterday by 0.12 per cent or N1.80 to sell for N1,543.03/$1 compared with the preceding day’s N1,541.23/$1.
The pressure on the domestic currency came as the access granted to the Bureaux de Change (BDC) operators by the Central Bank of Nigeria (CBN) to purchase FX from the official market through the Electronic Foreign Exchange Matching System (EFEMS) platform prepares to end next week, precisely on January 19.
The CBN had given a 42-day window to the operators to access the platform to help stabilise the Naira in December, and this expires next week.
On Friday, the Nigerian currency tumbled against the Pound Sterling in the official market by N30.78 to sell for N1,889.29/£1 compared with the previous day’s N1,858.51/£1, but gained N5.48 against the Euro to finish at N1,583.81/€1, in contrast to Thursday’s rate of N1,589.29/€1.
As for the parallel market, the Nigerian Naira remained stable against the US Dollar during the trading session at N1,650/$1, according to data obtained by Business Post.
In the cryptocurrency market, it was bearish as the US economy added 256,000 jobs last month, the Bureau of Labor Statistics reported on Friday, topping forecasts for 160,000 and up from 212,000 in November (revised from an originally reported 227,000).
However, the readings came after a number of recent economic reports triggered a broad-market pullback across asset classes such as crypto as investors quickly scaled back the idea of a continued series of Federal Reserve rate cuts in 2025.
Cardano (ADA) fell by 3.6 per cent to trade at $0.921, Solana (SOL) slumped by 2.8 per cent to $185.93, Ethereum (ETH) depreciated by 1.4 per cent to $3,233.27, Litecoin (LTC) lost 1.3 per cent to finish at $103.62, Dogecoin (DOGE) shed 0.5 per cent to sell at $0.3315, Bitcoin (BTC), waned by 0.2 per cent to $94,154.43, and Binance Coin (BNB) went south by 0.1 per cent to $693.30.
On the flip side, Ripple (XRP) jumped by 1.5 per cent to settle at $2.34, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) sold flat at $1.00 each.
By Dipo Olowookere
Profit-takers took control of Customs Street on Friday, plunging it by 0.08 per cent at the close of trading activities.
The sell-offs were across all the key sectors of the Nigerian Exchange (NGX) Limited on last trading session of the week.
The insurance space went down by 1.53 per cent, the banking index depreciated by 0.41 per cent, the consumer goods sector weakened by 0.16 per cent, and the energy counter slumped by 0.08 per cent, while the industrial goods sector closed flat.
At the close of business, the All-Share Index (ASI) tumbled by 79.68 points to 105,451.06 points from 105,530.74 points and the market capitalisation retreated by N48 billion to N64.303 trillion from N64.351 trillion.
Yesterday, investors traded 1.5 billion shares worth N19.4 billion in 12,877 deals compared with the 489.5 million shares worth N13.1 billion transacted in 13,010 deals in the preceding day, indicating a decline in the number of deals by 1.02 deals and a rise in the trading volume and value by 203.14 per cent and 48.09 per cent, respectively.
Wema Bank was the busiest stock with 976.2 million units valued at N9.8 billion, Tantalizers traded 53.0 million units worth 129.6 million, Universal Insurance sold 34.8 million units for N26.8 million, Access Holdings exchanged 33.9 million units valued at N843.8 million, and Nigerian Breweries traded 27.3 million units worth N873.3 million.
The heaviest loss was suffered by Sunu Assurances with a decline of 9.99 per cent to trade at N7.30, Eunisell shed 9.96 per cent to N17.35, SAHCO crumbled by 9.87 per cent to N30.15, DAAR Communications plunged by 9.28 per cent to 88 Kobo, and Sovereign Trust Insurance went down by 7.04 per cent to N1.32.
On the flip side, C&I Leasing gained 10.00 per cent to close at N4.51, Honeywell Flour appreciated by 9.99 per cent to N10.02, Trans Nationwide Express jumped by 9.89 per cent to N2.00, RT Briscoe rose by 9.83 per cent to N2.57, and Secure Electronic Technology grew by 9.46 per cent to 81 Kobo.
Business Post reports that the bourse ended with 33 price gainers and 25 price losers, indicating a positive market breadth index and strong investor sentiment.
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