By Raji Rasaki
Tinubu’s claim that ‘’we cannot point to more than one percent of GDP contribution from solid minerals’’ is TRUE
The presidential candidate of the All Progressives Congress (APC) in the forthcoming 2023 general election, Senator Bola Ahmed Tinubu claimed that solid minerals sector contributed less than 1 percent to Nigeria’s GDP”
On Thursday, November 10, 2022, the presidential candidate of the All Progressives Congress (APC), Senator Bola Ahmed Tinubu made this claim (see the video) when he was speaking at a town hall meeting with the mining and Agro-processing stakeholders in Lafia, Nasarawa State.
During the meeting, the presidential candidate lamented that Nigeria was well-endowed, given industrious, energetic population and vast inventory of land, water and natural resources. According to him, the nation has abundant, commercially viable solid mineral deposits such as coal, limestone, iron ore, bitumen, lead, zinc, gold and a variety of gemstones.
Despite all these. he however claimed that the solid minerals sector contributed less than 1 per cent to Nigeria’s Gross Domestic Product (GDP).
According to the National Bureau of Statistics, (NBS), the Gross Domestic Product (GDP) can be derived as the value of all goods and services available for final use and export. Having realised how solid minerals could contribute to the nation’s economy, state governments in Nigeria often engage the services of private miners to tap into the natural resources. These are called Artisanal and Small-Scale miners who engage in the extraction of natural resources, mostly with crude implements. Report had it that there are at least 1,273 ASM operators across the six (6) geo-political zones of the country, with 60.8% of these groups as at 2020 were from the Northern region.
Aside from these minor miners, there are four major companies involved in the production of solid minerals in Nigeria. These include Dangote Cement Plc., Lafarge Plc, BUA International Ltd. and Dantata and Sawoe Nigeria Limited. According to a 2020-release by the Nigerian Extractive industries Initiative (NEITI), these four (4) companies ‘’accounted for 64% of the total mineral production volume and 49% of royalty receipts’’.
Yet. evidence of low production of solid minerals in Nigeria was captured in the NEITI report when it observed that ‘’38 different minerals were produced in Nigeria in 2020’’ and that the activities in the solid minerals sector remain quite low, disclosing that ‘’out of the 850 companies that were in operation during the year, only 102 met the materiality threshold of N3 million for the audit.
Unfortunately, the report also noted that during the period under review (2020) there was no active state-owned enterprise operating in the sector.
In March, 2022, the Minister of Mines and Steel development also lamented that the sector had steadily declined from 5.6 percent in 1980 to about 0.33 percent in recent times.
Apparently seeking to make an impact, successive governments have leveraged the inadequacies of the solid minerals sector to score cheap political goals. In 2020, President Muhammadu Buhari reiterated his promise to establish gold refineries in Nigeria, hoping to ‘’generate no fewer than 250,000 jobs and over 500 million dollars annually’’ from the sector.
On November 10, 2022, Senator Bola Ahmed Tinubu, the presidential candidate of the APC made the same promise to Nigerians during the town meeting in Nasarawa State. ‘’My administration will develop the solid minerals sector, establishing policies that will encourage investment for growth in that sector’’. This promise has been reported here, here, here and in other various news media platforms,
While buttressing the rationale for his promise, Senator Bola Tinubu claimed that “Because we cannot point to more than one percent of GDP contribution from solid minerals. That, I reject’’.
During election campaigns, politicians are fond of dropping figures to swing public sentiment in their favour and it is incumbent that politicians must be held accountable to what they say. Hence, we have decided to check the veracity of the claim.
Having thought of the imperative of verifying the veracity of this claim, we sought to identify the volume of the solid minerals in Nigeria, at least in the last one year, precisely as at year 2021.
First, we sought evidence from the 2021 mineral production report by National Bureau of Statistics (NBS) which revealed that the grand total of the tons of solid minerals production at the end of 2021 was 89,482,541.07, suggesting an increase of 39.19% from 2020 outputs which stood at 64.29 million tons. The report, released in July 2022 also added that Limestone, Granite, and Laterite were the three biggest minerals mined in 2021.
Image: courtesy NBS report, 2021
What does this translate to in monetary value? How much contribution does the total output add to Nigeria’s Gross Domestic Product?
To answer these questions, we proceeded to find more evidence.
According to the NEITI audit released in 2020, (2021 audit report is being awaited), Nigeria’s total GDP in 2020 was ₦152.32 trillion, with the solid minerals sector contributing N686.64 billion, representing 0.45%.
In 2021, according to World Bank data and Trading Economics analysis, Nigeria’s Gross Domestic Product (GDP) increased to 440.78 billion US dollars, amounting to approximately N173.5 trillion; a value which represents only 0.05 percent of the world economy.
Yet. despite this increase, the Central Bank of Nigeria’s Economic Report, for the third quarter 2021 affirmed that solid minerals sector was providing the least contribution to Nigeria’s GDP growth with mere 0.01 US Dollar = 4.4 Nigerian Naira (NGN).
And what does the CBN figure translate to in terms of percentage contribution to national GDP?
Dataphyte analysis of the NBS report shows that the mining and quarrying sector’s total contribution to the GDP increased from 368.9 billion in 2019 to 1.101 trillion in 2021. This means the contribution of the sector to the country’s GDP increased from 0.26% in 2019 to 0.45% in 2020.
In 2021, the sector, having been increased in productivity to the tune of 89,482,541.07 million tons, still contributed 0.63% to total GDP of 440.78 billion US dollars, amounting to approximately N173.5 trillion.
In March, 2022, the executive secretary/CEO NEITI, Dr. Ogbonnaya Orji also confirmed that Nigeria’s solid mineral sector was contributing less than 1 percent to the nation’s GDP, having risen from 0.18% in 2018 to 0.29% in 2019.
The Central Bank of Nigeria’s Economic Report, for the third quarter 2021 disclosed that the solid minerals sector was providing the least contribution to Nigeria’s GDP growth with mere 0.01 US Dollar = 4.4 Nigerian Naira (NGN). The National Bureau of Statistics (NBS) 2021 data shows that Nigerian solid minerals’ total output stands at 89.5million tons approximately. Also, in the NBS 2021 and NEITI’s 2020 report, the solid minerals sector’s contribution to the national GDP was 0.26% in 2019, 0.45% in 2020 and 0.63% in 2021. Despite the positive progression, the sector still contributes less than 1% to Nigeria’s GDP.
Senator Bola Ahmed Tinubu’s claim that ‘’we cannot point to more than one percent of GDP contribution from solid minerals’’ was correct.