A historic investment opportunities is being driven by the Solid Minerals Development Fund of Nigeria (SMDF), which is spreading partnerships across the private sector to create a sustainable revenue stream for Nigeria outside oil and gas.
No doubt Nigeria is known to have over 44 deposits of different solid minerals including gemstones in large quantity, but unfortunately the sector contributes less than 0.3 per cent to the Gross Domestic Product (GDP) of the nation.
According to reports Nigeria could earn well over $12 billion from gemstones annually.
According to the report the country’s current income of “between $10 billion and $12 billion” was based on the value of gemstones in the international market extracted from Nigeria.
Experts have also suggested establishment of certified laboratories to certify and identifies gemstones which they believe is partly responsible for Nigeria’s’ current losses in the extractive sector.
A gemstone (also called a gem, fine gem, jewel, precious stone or semi-precious stone) is a piece of mineral crystal which is in cut and polished form used in making jewellery or other adornments.
Most gemstones are hard, but some soft minerals are used in jewellery because of their lustre or other physical properties that have aesthetic value.
Examples of gemstones are Amethyst, Sapphire, Pearl, Topaz, Emerald, Aquamarine, Ruby, Tourmaline, Quartz etc.
The global Gemstone and Jewellery industry has been valued to over $300 billion and is projected to cross $443 billion by 2022, an annual growth of over 4.73 per cent, according to a report in the African gemstone jewellery exhibition and seminar publication.
Experts say India is the current global leader, with a market share of about $60 billion based on 2017 records predicted to reach $100- $110 billion by 2021 to 2022. This value contributes around 7 per cent of the country’s GDP employing over 4.64 million workers which is projected to rise to a peak of 8.23 million by 2022.
According to experts, the Nigerian economy does not benefit, financially from gemstone trade and the current contribution of the solid minerals sector to the country’s overall GDP averages a paltry 0.3 per cent. This meagre amount is mostly due to laundering.
Previous accounts shows that gemstones worth $3 billion are exported annually from Nigeria, but mostly unofficially.
Nigeria contributes about 10 per cent ($1.2 billion) of the total $12 revenue generated annually by Thailand from gemstone trade but is losing tremendously on all sides and it is therefore critical to urgently revisit the disorganised gemstone and jewellery sector and turn the tables by making Nigeria a global hub just as India has done.
However, in a recent move, the Federal Ministry of Mines and Steel Development commissioned the Ultramodern International Gemstone Market Centre and the Artisanal and Small Scale Mining (ASM) Cluster Project in Ibadan, Oyo State.
The initiative was part of efforts to unlock the potential of the mining sector and provide an alternative revenue source for Nigeria.
It was seen as an opportunity to promote job creation and capacity development in the gemstone mining sector, particularly in Oyo State and its environs.
The market, designed based on the cluster concept, houses several federal government initiatives to curb gemstone smuggling and enhance the capacities of Nigerian youths to participate in downstream gemstone and gold value chains.
It is expected to create sustainable competitive advantages for the development of downstream gemstone and gold mining industries, increase employment opportunities, boost trade performance, and generate higher corporate profits.
During the event, mining equipment was presented to mining cooperatives because the gemstone market is seen as a crucial step towards developing the mining sector in Nigeria, which has been identified as a key area for economic growth and diversification.
It was anticipated then that with the commissioning of the ultramodern facility, Nigeria is poised to become a major player in the global gemstone market, while providing job opportunities and promoting sustainable development in the mining sector
Building Strategic Partnership
Africa Finance Corporation (AFC), the continent’s leading infrastructure provider and the Solid Minerals Development Fund of Nigeria (SMDF), a Nigerian mining-focused development fund, have a transformative partnership aimed at derisking Nigeria’s mining sector and scaling up artisanal miners in the country to an industrial level of operation.
This strategic collaboration, entered specifically last year October, follows a cooperation agreement signed by AFC and SMDF to address the dearth of expertise and funding for early-stage mining projects, paving the way for these projects to reach financial close and full-scale operations.
The Fund was very enthusiastic about the idea because Nigeria is rich in mineral resources and has immense potential for mining development.
However, the lack of available expertise and funding has posed challenges in advancing mining projects.
Through this partnership, AFC and SMDF aim to bridge this gap to unlock the immense potential of Nigeria’s mineral resources. By pooling their resources and expertise, these two leading institutions will not only provide investment opportunities but a joint project development facility that includes technical support, ensuring that promising mining projects receive the guidance and funding they need to thrive.
One of the key deliverables of this collaboration is the AFC-SMDF Investment Manual.
This comprehensive document will offer project sponsors a clear understanding of how the joint project development facility operates, its objectives, and the specific requirements for project consideration.
The manual will also feature an appraisal checklist outlining the criteria that both institutions require for project evaluation.
To streamline the project submission process, AFC and SMDF have created a dedicated portal for project sponsors. This portal will be managed by PricewaterhouseCoopers (PWC), a renowned global professional services firm, working with renowned Nigerian consulting firms, to screen and conduct initial evaluations. Subsequently, projects will be submitted to AFC and SMDF for further assessment.
To further improve the mining sector in Nigeria, AFC and SMDF have also engaged Wood Mackenzie, a leading global research and consulting firm, to undertake a comprehensive study assessing the feasibility of establishing a midstream processing plant in Nigeria.
This study will focus on critical minerals such as Lithium, Nickel, and other energy transition metals abundant in the country. By evaluating the profitability and return potential of midstream and downstream mineral processing projects, the study will create a robust foundation for AFC and SMDF to deploy their balance sheets in order to further de-risk the investment landscape for potential investors.
On the partnership, the AFC, stated, “The world needs African resources to fully transition to clean-energy in the long term, and more investment is required to sustainably mine and develop in-continent processing capacity for commodities that are critical to the energy transition. In this regard, we are excited to partner with the Solid Minerals Development Fund of Nigeria to derisk the country’s mining sector. This collaboration signifies our commitment to unlock the vast potential of Nigeria’s mineral resources by leveraging the wealth of our renewable energy sources for local processing, thus fostering sustainable development and economic prosperity in Nigeria and Africa.”
Fatima Umaru Shinkafi, Executive Secretary and CEO of Solid Minerals Development Fund, said: “We are pleased to deepen our cooperation with the AFC through collaborating on these strategic initiatives to support the Nigerian mining industry. I am incredibly grateful for the Honourable Minister’s support, which has been critical to developing these initiatives. These initiatives align with the Renewed Hope Agenda and the Ministry’s Transformation Agenda of leveraging the mining sector to catalyse economic growth, competitiveness, and job creation.”
This partnership between AFC and SMDF is a pivotal step toward harnessing Nigeria’s mineral wealth and positioning the nation as a key player in the global mining industry. Since 2014, the Corporation has invested more than $900 million in mining projects across Africa including the Segilola Gold Mine in Osun, Nigeria, the Karowe Diamond mine in Botswana and the Bon Ami bauxite project in north-western Guineas.
Legislative Support
The SMDF has also gone into collaboration with the country’s legislative arm of the government.
Shinkafi, had said that the major focus of SMDF is to grow fund by attracting foreign investment, increasing export proceeds and as well, create jobs for Nigerians, hence the partnership with African Finance Corporation.
She stated this while addressing the media after a strategic meeting with the Senate Committee on Solid Minerals, chaired by Senator Sampson Ekong (Akwa Ibom South).
According to her, SMDF’s partnership with African Finance Corporation (AFC) is to deploy more resources for the generation of more geo scientific-data that will assist investors in making informed decisions on critical minerals.
She said, “Last year, we signed a key partnership agreement with the African Finance Corporation to fund Greenfield exploration, which is a data driven project that will attract investment into the sector. We have several artisanal projects as well; 80 per cent of the sector is currently artisanal”
“Our focus is to grow fund to impact and create jobs to mitigate against the current economic situation, to increase forex earnings from exports.
“If we can increase the critical mass of investment and export proceeds, we can increase our Forex and strengthen the naira”.
In his submission, Senator Sampson Ekong, Chairman, Senate Committee on Solid minerals highlighted the areas in which the committee through legislation, will collaborate with SMDF to strengthen the current policy which is guiding Solid Mineral Development Fund and as well perform its oversight function.
Ekong said they are committed to working closely with key players so that they can drive the sector forward. “I have been very clear that God in his benevolence has been very merciful to Nigeria”, adding, “We are so richly endowed for our people and for Africa.”
He said what the committee did was to look at the gaps and see how those gaps can be addressed in terms of the legal framework, policy and its implementation, adding that through the partnership, they are going to “explore areas of collaboration that will lay a strong foundation for growth”.
Engaging Women In Mining To Raise Women Gemstone Entrepreneurs
In a more determined effort the SMDF, is creating multiple opportunities for Nigerian women in the utilisation of Gemstone products across value chain through structured training programmes which kicked off in Lagos on Tuesday.
The projection is to raise 1,000 women entrepreneurs to explore huge economic opportunities in Gemstone mining and utilisation.
At the commencement of the first leg of the two day training, the executive secretary (ES) of SMDF, Hajia Fatima Shinkafi, explained that the training on Gemstone and Jewellery is a gateway to economic independence, skill acquisition, and social empowerment for the women in Nigerian communities.
Shinkafi said the exercise aims at planting the seeds of creativity, entrepreneurship, and resilience, which will grow to yield lasting benefits for trainees, their families, and the society at large.
Gemstones, she explains are among the most valuable natural resources found in the country and that Nigeria is blessed with an abundance of precious stones, many of which remain untapped or under-utilised.
This training will offer them the opportunity to not only create beautiful jewelry but to also build thriving businesses
“Solid Minerals Development Fund (SMDF) is fully committed to ensuring that training and acquisition of knowledge in the sector is sustainable and this explains why we are launching the training of 1000 young women from different parts of the country with 100 participants at this gemstone and jewellry making training.
“We are not just focused on training; we are committed to the continued growth of the trainees. The target is to train 1000 women, those who do basics can move on and be part of an advanced training.” she said.
The SMDF according to the ES, will support them with loans and grants to set up their own businesses so that they can turn what they have learnt into a successful enterprise.
She added, “We are at a time when diversification of our economy is crucial. The mining and value addition of gemstones present a unique opportunity for economic growth. It holds immense potential in terms of economic value, job creation, and export opportunities.
“By training women in this field, we are not only tapping into a lucrative market but also breaking barriers and ensuring that women have equal access to the opportunities this sector presents.”
Sharing the agency’s vision around the initiative, she said the Fund is not only committed to the training but intends to provide support, linkages, and opportunities for growth.
“Whether it is through facilitating access to markets, providing mentorship, or supporting the formation of cooperatives and small businesses, we want to ensure that the skills the trainees acquire lead to long-term economic empowerment.
“Our commitment to empowering women is unwavering, and we believe that when women are given the tools to succeed, entire communities benefit,” she said.
Shinkafi underscored the commitment of President Bola Tinubu’s administration to reducing Nigeria’s reliance on crude oil through economic diversification by harnessing the country’s rich solid mineral resources.
She expressed her appreciation for the steadfast support of the Hon. Minister, Dr. Dele Alake, in advancing the Agency’s mandate.
She also highlighted the Minister’s dedication to women’s empowerment in the mining sector, noting his consistent emphasis at various fora on the need to equip women with the essential skills to actively engage in the mining value chain.
Speaking to NATIONAL ECONOMY at the event, President of Women in Mining, Engineer Dr. Janet Adeyemi, said that while she was in the House of Representatives, she saw the need, with some of her colleagues, to diversify from oil and gas and approached then President Olusegun Obasanjo who endorsed their initiative to open up the mining sector.
“So to do that diversification, we went to Mister President, convinced him on why we have to look at the mining sector all over again. And you and I, we agree today that take it or leave it. Obasanjo makes impact in terms of transitional breakthrough from what it used to be to the direction we were going.
“So he embraced the mining sector, but because of the experiences I’ve gotten, because when I graduated some 43 or 44 years ago, you find out that women are not allowed to work in the oil sector.”
Adeyemi, said the training focuses on raising women entrepreneurs in the field of mining and transformation of Gemstone into other economic uses.
Also speaking, Nigeria’s former Ambassador to Philippines and Cambodia, Ambassador Folakemi Akinleye, said the training would go a long way in improving lives of rural women and open more opportunities in the mining sector which comes with huge investment and economic growth.
Adeleye, sharing her experience said in Philippine women are fully engaged in mining and making enormous contributions to economic development of that country.
She however, observed that lack of skills, inadequate funding has mitigated women impact in the sector but expressed confidence that the training will help to advance women’s careers opportunities in the sector.
Mrs. Tope Omage, former Director with the Central Bank of Nigeria (CBN) described SMDF, involvement and intervention as a milestone and landmark intervention to improve income of women in Nigeria.
Omage, said the exercise will go a long way in improving skills of women, create economic opportunities and improve scale of employment in the country.
In his conversation with the media, one of the programme facilitators, and a Geologist, Dr. Tersoo Aga, said Nigeria is most blessed when it comes to human and natural resources, and particularly for the solid mineral sector.
Aga, said Nigeria is blessed with so much comprising of all minerals, industrial minerals, with over 500 different types of gemstones.
According to him, the good aspect of it is that these are naturally occurring and occur predominantly within what we call the pegmatite belt of Nigeria that stretches from the southwestern part of the country to the northeastern part of the country.
This he said has a stretch of about 400 kilometers in length, and then 150 kilometers in width.
However, he noted that the country has not done systematic exploration to know the extent and estimated deposits of the mineral resources.
Three participants, Sola Adesanya, from Lagos State, Eden Durosola Precious (Lagos) and Hajia Umar Abubarkar (Zamfara) who spoke about their experience and expectations expressed optimism that the training will help them to pursue new career opportunities in mining.
They applauded the SMDF and Women in Mining for providing them the opportunities to explore the mineral resources in a sustainable manner under proper supervision and regulations.
