“The capital market is a key catalyst for development”
THE capital market has been described as a key catalyst for the development of critical sectors of the economy because it has a credible platform for securing medium and long term finance.
Minister of Finance, Budget and National Planning Ms. Zainab Ahmed said during a webinar hosted by the Securities and Exchange Commission, in conjunction with the Ministry of Solid Minerals Development.
Its theme was âCapital Market Funding of the Solid Minerals Sector and the Critical Role of Commodity Exchangesâ.
Ahmed said the facilitation of financing and the provision of structured market platforms such as commodity exchanges portend an important addition for the mining and solid minerals sector, noting that the webinar and its theme was highly relevant to economy given the need to diversify and develop the economy. and to enable the nation to achieve sustainable development in the post COVID-19 pandemic.
According to her, given the economic challenges brought about by the pandemic, the federal government’s efforts to achieve diversification have been affected by declining revenues, underscored by the volatility of global oil prices, which is our main source of income in currencies.
âThe mining sector is strategically based as an alternative source of income generation in the federal government’s economic diversification plan. It also has the potential to create jobs and develop rural environments for other benefits.
“The federal government’s mineral export guidelines were formulated in response to the need to accurately maintain mineral trade data, to effectively track the evacuation of export revenue, to optimize collecting royalties and facilitating the implementation of the federal government’s free shipment inspection policies on each export transaction, as these are international best practices in accordance with the Marrakesh Protocol of GATT 1994 â, said Ahmed
She said the initiative to employ the commodities exchange in this regard will promote responsible accounting and fair governance.
According to her; this initiative and others will also facilitate the collection of all royalties and fees owed to the government from the solid mineral export sector, ensuring the integrity of mining data, minimizing revenue leakage and removing unwarranted bottlenecks encountered with transactions by both mineral exporters as well as our regulatory bodies.
âIdentified as one of the frontiers of opportunity in the new economic reality, the Nigerian commodity trade ecosystem serves as a focal point that supports and accelerates the development of non-oil commodities, which will be complementary to efforts in courses to diversify the national economy. . Ineffective linkages between buyers and sellers in sufficient programs will have the capacity to offer solutions to some of the fundamental challenges inherent in the mining sector.
âStreamlining mining sector operations through the commodity trading ecosystem and other initiatives will ensure proper regulation of the solid mineral mining industry in Nigeria. I am confident that the outcome of this webinar and the strategic partnership between the mining sector and the capital markets community will enhance the competitiveness of our new non-oil commodities and complement the economic diversification of the federal government, âsaid Ahmed.
She assured the unwavering support of the Federal Ministry of Finance, Budget and National Planning to ensure the achievement of the federal government’s overarching goal of developing the country’s mining potential.
âThe reality is that the nation has more to gain from an organized solid mining and mineral extraction industry and the capital market is there to contribute its share.
“This webinar is a signal that with the proper collaboration between sectors, institutions, regulators and operators, we can exceed our targets as soon as possible and Nigeria will reap huge benefits from these forums,” said Ahmed. .
In his welcome speech, SEC Managing Director Mr. Lamido Yuguda said that with more than 44 minerals found across the federation, the solid minerals sector can play an important role in the ongoing quest to diversify the economy of its heavy dependence on crude oil.
Yuguda said it has also been identified as the backbone of the investor value chain, which is a critical source of inputs for key industries such as construction, automotive, electronics, aircraft. and shipbuilding.
âWe believe that the Nigerian commodity trading system and indeed the capital market can be transformational patronage to bring about these positive changes in the sector.
âWith opportunities presented for better access to commodity marketing, price discovery, and valuable market information, a commodity trading ecosystem has the potential to foster inclusive mining prosperity by effectively linking commodities to industries on a sufficient scale, thereby promoting production, creating jobs, improving living standards and unleashing the economic potential of mining communities.
âIt will also improve the financial inclusion of artisanal miners, promote mineral production, boost exports and ultimately generate economic development, among other benefits. There is no doubt that greater connectivity of the mining sector and the commodity trading ecosystem will ensure that mineral commodities can be traded on a transparent, efficient and organized trading platform provided by the stock exchanges. raw materials, âYuguda said.
In his opening speech, the Minister of State at the Ministry of Solid Minerals and Steel Development, Dr Uchechukwu Ogah, described the webinar as timely because it comes at a time when President Buhari has put in place all the necessary mechanisms to reorganize the sector for economic stability.
He however expressed disappointment that over 90 percent of the contribution of artisanal miners and small operators to employment is still very low with a contribution to GDP of 0.5 percent.
âWe are eager to change this through the implementation of the road map to contribute about five percent of GDP by 2025. Inadequate funding has been the bane of underdevelopment; It is on this premise that I welcome this partnership with the SEC âOgah.
He said some of the ministry’s expectations are that the exchange creates the vital link between demand and the supply chain to allow investments to be demand driven.
âWe are asking for the facilitation of the infrastructure necessary for proper and timely delivery of products; Mobilize financing from the private sector at comparative rates in the capital market. Like mobile bonds, derivatives, futures, etc. created to support the mining system, âOgah said.
He added that the collaboration will be of immense benefit to the nation, urging all stakeholders to enter into the partnership for the sustainable development of the sector, as this will put Nigeria in the limelight as a major mining center. of the world.