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FG decries mining’s N400b contribution to GDP

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FG decries mining's N400b contribution to GDP
Minister of Solid Minerals Development, Kayode Fayemi, on Thursday said mining and related services contribute only N400 billion to the Gross Domestic Product (GDP) and should be boosted with new investments.
The minister who spoke at the 2016 Stanbic IBTC Bank Iron Ore and Steel Business Session, held in Lagos, said mining should strive to match contributions of other key sectors like agribusiness at 22 per cent, and manufacturing 6.8 per cent, to the GDP.
He said the ministry is working with banks to create low-cost funds for the mining sector adding that banks are already working hard to establish mining desks.
The minister described steel as the world’s most important engineering material crucial to any country’s industrialization objectives, adding that Nigeria imports an estimated $3.3 billion of processed steel and associated derivatives, representing 80 per cent of the $4.2 billion total metal products imported per year.
“The Federal Government of Nigeria is of the view that the steel industry can be attractive to investors due to the large untapped demand potential similar to cement in 1990s. The current market size of $3.3 billion per annum has potential to grow to $15.1 billion per annum with increased industrialization,” he said.
According to the minister, to fund the infrastructure needs of its growing economy over the next 30 years, Nigeria would need to spend about $3 trillion.
“This investment would allow Nigeria to close its current infrastructure gap and sustain an ideal infrastructure stock level of 70 per cent of GDP as it builds and maintains infrastructure assets across all its seven key sectors,” he said.
Head of Mining at Standard Bank, South Africa, Anders Alfredson, said Nigeria market has potential to develop domestic iron ore and other steel raw material resources and as an emerging mining jurisdiction, opportunity to create stable legal framework.
He said that Standard Bank, which is the parent company of Stanbic IBTC Bank, plays big in the mining industry, adding that there is a relationship between steel production and GDP growth.
“We have significant experience in funding infrastructure in Nigeria,” he said.
Alfredson said Nigeria is not starting mining funding from the scratch adding that Nigeria should develop a legal framework in place to get mining working.

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