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
Renewed buying interest raised the Nigerian Exchange (NGX) Limited by 0.33 per cent on Monday, with gains recorded in almost all the major sectors of the bourse at the close of transactions.
According to data harvested by Business Post, the insurance counter expanded by 0.62 per cent, the banking index grew by 0.59 per cent, the energy sector appreciated by 0.40 per cent, and the consumer goods space improved by 0.10 per cent, while the industrial goods segment closed flat.
When the closing gong was struck by 4 pm to signify the close of business on Customs Street, the All-Share Index (ASI) was up by 1,113.76 points to 243,707.07 points from 242,593.31 points, and the market capitalisation chalked up N714 billion to close at N156.308 trillion compared with the previous session’s N155.594 trillion.
Interest in Nigerian stocks yesterday resulted in a rise in the activity level, with the trading volume soaring by 17.86 per cent to 717.2 million units from 608.5 million units. The trading value advanced by 77.19 per cent to N56.7 billion from N32.0 billion, and the number of deals surged by 36.22 per cent to 73,321 deals from 53,826 deals.
FCMB was the busiest stock during the trading day, with a turnover of 152.3 million units worth N1.8 billion, Premier Paints exchanged 61.0 million units valued at N135.3 million, Dangote Cement traded 34.7 million units for N29.7 billion, The Initiates sold 32.8 million units worth N1.0 billion, and Jaiz Bank transacted 32.6 million units valued at N293.3 million.
Yesterday, the market breadth index was positive after the exchange closed with 37 price gainers and 28 price losers, representing strong investor sentiment.
International Energy Insurance gained 9.92 per cent to settle at N7.98, the Initiates added 9.91 per cent to its share price to quote at N32.15, ABC Transport garnered 9.68 per cent to trade at N6.80, Abbey Mortgage Bank grew by 9.63 per cent to close at N10.25, and Linkage Assurance soared by 9.36 per cent to N1.87.
On the flip side, Fidson Healthcare gave up 10.00 per cent to finish at N122.85, Academy Press crashed by 9.70 per cent to N7.45, RT Briscoe depreciated by 9.43 per cent to N13.45, SUNU Assurances tumbled by 9.37 per cent to N4.06, and Learn Africa decreased by 8.70 per cent to N10.50.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a marginal 0.05 per cent drop on Monday, June 8, depleting the market capitalisation by N1.27 billion to N2.606 trillion from N2.607 trillion, and cutting the Unlisted Security Index (NSI) by 2.12 points to 4,356.20 points from the previous 4,358.32 points.
The contraction witnessed during the session was triggered by a price loser, which overpowered that gains recorded by two securities on the trading platform.
Data indicated that MRS Oil Plc lost N6 at the close of business to settle at N165.00 per share compared with last Friday’s price of N171.00 per share.
Conversely, Lighthouse Financial Services Plc added 9 Kobo to sell at N1.03 per unit versus 94 Kobo per unit, and Central Securities Clearing System (CSCS) Plc appreciated by 8 Kobo to N78.48 per share from N78.40 per share.
The volume of securities traded by investors yesterday soared by 51.9 per cent to 213,188 units from 140,345 units, and the value of securities increased by 12.6 per cent to N20.2 million from N17.9 million, while the number of deals executed fell by 7.4 per cent to 25 deals from 27 deals.
Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with 3.4 billion units sold for N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units valued at N6.5 billion, and CSCS Plc with 64.8 million units exchanged for N4.4 billion.
GNI Plc also remained as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, trailed by Infracredit Plc with 2.3 billion units transacted for N6.5 billion, and Resourcery Plc with 1.1 billion units traded for N415.7 million.
By Adedapo Adesanya
The Naira opened the new trading week on a negative note on Monday at the Nigerian Autonomous Foreign Exchange Market (NAFEX) and the black market.
At the parallel market, the Nigerian currency weakened against the US Dollar by N5 to sell for N1,380/$1 compared with the preceding session’s rate of N1,375/$1, and at the GTBank FX desk, it shed N1 to trade at N1,373/$1 versus N1,372/$1.
At the official market, it lost 63 Kobo or 0.05 per cent against the Dollar during the session to close at N1,362.84/$1, in contrast to last Friday’s value of N1,362.21/$1.
However, the Nigerian Naira gained N2.30 against the Pound Sterling at the spot market yesterday, quoting at N1,821.29/£1 compared with the previous rate of N1,823.59/£1, and improved against the Euro by 23 Kobo to settle at N1,574.35/€1 versus N1,574.58/€1.
Data from the Central Bank of Nigeria (CBN) showed that interbank forex turnover increased to $92.248 million across 90 deals, from $73.565 million last Friday.
On the policy front, participants believed that the application of the fourth edition of the Foreign Exchange Manual of the central bank, which introduces updated guidelines for foreign exchange transactions and tightening compliance requirements for authorised dealers and market participants, will enhance market flexibility and ease previous restrictions.
Meanwhile, the cryptocurrency market snapped from recent declines, jolted by Strategy’s purchase of 1,550 Bitcoin for approximately $101 million, increasing its total holdings to 845,256 BTC. The company raised $181 million through common stock sales, using the proceeds to fund the bitcoin purchase and increase its cash reserves to $1 billion, pushing the price of the coin higher by 3.2 per cent to $63,731.69.
Cardano (ADA) appreciated by 8.4 per cent to $0.1738, Ethereum (ETH) rose by 5.2 per cent to $1,711.54, Solana (SOL) expanded by 5.1 per cent to $67.82, and Ripple (XRP) improved by 4.9 per cent to $1.18.
Further, Dogecoin (DOGE) jumped by 4.3 per cent to $0.0873, Binance Coin (BNB) soared by 2.7 per cent to $609.50, and TRON (TRX) increased by 0.7 per cent to $0.3274, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $0.9997 and $0.9998, respectively.
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