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 Dipo Olowookere
The dominance of the bears on the Nigerian Exchange (NGX) Limited was consolidated on Friday, after further inflicting an 0.12 per cent loss at the close of trading activity.
All the key sectors of the local stock market turned red yesterday as a result of sustained profit-taking, though the industrial goods space was flat.
The insurance counter lost 1.49 per cent, the energy index shed 0.63 per cent, the consumer goods segment declined by 0.46 per cent, and the banking sector tumbled by 0.23 per cent.
Consequently, the All-Share Index (ASI) retreated by 398.18 points to 242,619.20 points from 243,017.38 points, and the market capitalisation receded by N257 billion to N156.624 trillion from N156.881 trillion.
Fortis Global Insurance lost 9.31 per cent to trade at N2.63, Omatek depreciated by 9.04 per cent to N1.51, John Holt slipped by 9.00 per cent to N9.10, RT Briscoe slumped by 7.94 per cent to N11.60, and Dangote Sugar went down by 7.79 per cent to N64.55.
But International Energy Insurance gained 9.92 per cent to sell for N5.32, Trans-Nationwide Express appreciated by 9.65 per cent to N2.84, Guinea Insurance improved by 6.67 per cent to 80 Kobo, Regency Alliance grew by 6.25 per cent to 85 Kobo, and Japaul jumped by 5.36 per cent to N2.95.
The market breadth index remained negative, with 30 price losers and 21 price gainers, indicating weak investor sentiment.
The level of activity contracted yesterday, with the trading volume, value, and number of deals down by 66.67 per cent, 10.65 per cent, and 5.60 per cent, respectively.
This was because market participants transacted 1.4 billion shares worth N45.3 billion in 39,134 deals during the session compared with the 4.2 billion shares valued at n50.7 billion traded in 41,454 deals on Thursday.
Fortis Global Insurance was the most active equity for the day, with a turnover of 874.1 million units valued at N2.4 billion, Cornerstone Insurance sold 100.3 million units worth N506.5 million, Universal Insurance traded 56.7 million units for N44.5 million, Sterling Holdings exchanged 53.3 million units worth N402.9 million, and MTN Nigeria transacted 44.6 million units valued at N31.4 billion.
By Adedapo Adesanya
The Naira maintained stability against the United States Dollar in the different segments of the foreign exchange (FX) market on Friday, August 14, according to data obtained by Business Post.
At the Nigerian Autonomous Foreign Exchange Market (NAFEM), the local currency remained unchanged at N1,357.65/$1, but lost N6.05 against the Pound Sterling to trade at N1,840.10 versus the previous session’s N1,834.05/£1, and depreciated against the Euro by N4.70 to sell for N1,571.70/€1 compared with the preceding day’s N1,567.00/€1.
At the black market, the Nigerian currency traded flat against the Dollar at N1,395/$1, but gained N3 at the GTBank forex desk to quote at N1,364/$1 versus Thursday’s exchange rate of N1,367/$1.
Data from the Central Bank of Nigeria (CBN) showed that interbank FX transactions surged by 51.2 per cent to $119.594 million from $79.097 million. These transactions were executed in 137 deals, higher than the 98 deals recorded a day earlier.
FX inflows from exporters, remittances and other sources, alongside demand from importers and individuals requiring Dollars, continue to shape market conditions.
Meanwhile, the cryptocurrency market recovered yesterday after experiencing a downturn in the previous sessions following reports that index provider MSCI has proposed new “non-operating company” screens for its Global Investable Market Indexes. Although the framework does not explicitly target cryptocurrency, it evaluates whether a company’s core operating assets constitute more than 50 per cent of its total holdings.
Heavy digital asset treasury adopters, including Strategy and Metaplanet, fail the proposed criteria and face potential removal during upcoming index rebalancings. While inclusion in major equity benchmarks previously allowed passive index funds and ETFs to automatically acquire these stocks, their removal could trigger forced institutional selling.
Dogecoin (DOGE) grew by 0.7 per cent to $0.07, Binance Coin (BNB) expanded by 0.6 per cent to $611.34, Ethereum (ETH) added 0.4 per cent to trade at $1,879.65, and Bitcoin (BTC) increased by 0.2 per cent to $63,045.87, with Ripple (XRP), the US Dollar Tether (USDT), and the US Dollar Coin (USDC) flat at $1.00, respectively.
But Cardano (ADA) lost 1.2 per cent to trade at $0.1795, TRON (TRX) shed 0.4 per cent to finish at $0.3323, and Solana (SOL) declined by 0.2 per cent to $75.60.
By Adedapo Adesanya
Oil price climbed over $1 a barrel on Friday on tanker attacks and a lack of progress on a peace agreement between the President Donald Trump administration and Iran’s leadership.
Brent futures settled at $88.52 a barrel after gaining $1.45 or 1.67 per cent, and the United States’ West Texas Intermediate crude futures finished at $82.40, up $1.15 or 1.42 per cent.
Market analysts noted that new attacks on tankers and lack of progress on a cease-fire agreement, which, in turn, is making traffic in the Strait of Hormuz constrained, adding pressure to the waterway through which 20 per cent of global supply can pass.
Two vessels from the state-owned Abu Dhabi National Oil Company were attacked while transiting the strait on Thursday. Iran’s Revolutionary Guards have previously threatened action against vessels transiting the strait if they are linked to its adversaries or fail to comply with Iranian directives.
As the US and Iran made claims over control of the strait, shipping traffic through the channel fell below the month’s average. Before US-Israeli attacks on Iran began in late February, the strait handled about one-fifth of global oil and liquefied natural gas supplies.
The US said it could maintain a naval blockade of Iran indefinitely and increase economic pressure on Tehran in response to stalled ceasefire talks.
The country’s Treasury Secretary Scott Bessent said there will be more announcements coming next week because “we are going to apply measures like have never been seen in the history of economic isolation of a country.”
Crude oil exports from Russia’s Sheskharis terminal at the Black Sea port of Novorossiysk were suspended on Friday following a drone attack, adding to disruptions at one of the country’s key export outlets.
The Organisation of the Petroleum Exporting Countries (OPEC) had slashed its outlook for 2026 global oil demand growth to 580,000 barrels per day, a stark contrast to the International Energy Agency’s 1.6 million barrels per day decline, marking the fourth straight month when the Vienna-based organisation was forced to curb its forecast amidst the Hormuz crisis.
In its monthly report, the IEA predicted that global supply will fall by 4.3 million barrels per day in 2026, pushing the Q3 deficit to 1.8 million barrels per day even as record fuel prices lead to an unprecedented 1.6 million barrels per day demand destruction.
