Gold mining in the North is a billion-dollar business. Why is it not captured in the budget?

The intensified killings in Zamfara due to the activities of bandits raised so many questions. Though the killings did not start today, it was, however, largely underreported by the media because of the general election. As soon as the elections were over, the national space was flooded with news of killings in the state.

The first question is the seeming inabilities of security agencies, especially the army to curtail the crisis and bring the killings to an end. This is as a result of the way the army undertook operations in the East and Niger Delta, occupying streets and homes and helping to alter elections. The minister of defence who is from the state was overheard blaming traditional rulers for the crisis. But there seems to be more to it than he is divulging to the public.

The second question is the object of attraction in those areas that sparked off the hostilities. Some have argued that the origin of banditry in Zamfara has its root in the resources in the area. One of such resource is Gold which is said to be in abundance in those troubled areas. Others have argued that the crisis in Zamfara is beyond the resources in the state.

However, what they have not disputed is the issue of mining of gold in the area by people who no one knows. This mining activities, according to sources, is worth over 10 billion dollars annually. And in a desperate measure to curtail the killings in Zamfara which have reached an embarrassing level, the Federal Government through the Acting Inspector General Of Police, Mohamed Adamu, banned mining activities in Zamfara. He also warned that mining licenses of companies that disobeyed such directives will be revoked.

Recall that in 2010, over 400 children died from lead poisoning according to a report by Medicins San Frontier. Lead is used in Gold mining.

The third question is who issued such licenses and why are the proceeds from mining in the North not captured in the budget?

A Mining lease is a contract to work in a mine and extract mineral or other deposits from it under specified conditions such as conditions on the amount and type of work to be done. The lessor is compensated in the form of either fixed rent or royalties based on the amount of ore mined. A mining lease is also known as mining engineering. in Nigeria, mining leases have 25 years expiration life.

According to the Nigerian Mining Cadastre Office, there are currently 255 mining leases with over 20 percent of such leases mining Gold in Birni Gwari, Kaduna State; Shiroro and Rafi in Niger State; Borgu in Taraba State; Maru, Bukkuyum, Gummi and Anka in Zamfara State; Danja in Katsina; Wasagu in Kebbi State. There are also other mining leases in Plataue, Adamawa that mine Gold. Nickel, Silver, Cobalt, Manganese, Copper and Uranium are covertly being mined in Kaduna, Kano and Katsina. Incidentally, most of these mining leases were obtained from 2014 t0 2017.

However, Bukkuyum and Gummi which are the centre of Gold mining in Zamfara are also theatres of killings leading to mass migration of locals to other places

Going further, the price of an ounce of gold in the international market is $1, 302.55 while a kilo of gold is $41, 877. 29. When you multiply the amount of an ounce of gold by the official dollar exchange of 357, it gives you #464, 814 while a kilo of gold gives you # 14, 950, 089.

But in the 2019 budget, revenues from mining in the North were not captured or were not clearly spelt out. Not even in the years before were revenues from mining in the North captured in the budget.

According to the budget office, the distribution of expected FGN revenue are as follows: Oil Revenue will account for 52.9% of the 2019 budget funding.

Other areas that the government projected to get funds for the budget from are:
▪ CIT – 11.5%
▪ VAT – 3.3%
▪ Customs – 4.3%
▪ Independent Revenue – 9.0%
▪ Signature Bonus – 1.2%
▪ JV Equity Restructuring – 10.2%
▪ Grants & Donor Funding – 3.0%
▪ Domestic Recoveries & Fines – 2.9%
▪ Others* – 1.7%

However, giving the fact that Gold trade is very lucrative and it is mined in commercial quantities in Zamfara, Kaduna and Niger, why are the proceeds from these mining not captured in the budget?

Recall that the Kaduna State Governor, Mallam Nasir El-Rufai during the maiden Kaduna Economic Forum said that “We have just found out that there is more gold in the Birnin Gwari Local Government Area of Kaduna than in South Africa.

“We are discussing with a big international mining company to come and explore our gold reserves in Kaduna State.

“We are focusing on mining and agriculture in creating jobs in this state. The mining company we are discussing with is going to train our local miners and will group them into cooperatives so that they would become like sub-contractors to them and be able to work with them. We are working with the Federal Government very closely to ensure that this happens”

There are so many contradictions in El-Rufai’s statement above. The state government knows that Gold is in their area and is being mined already and wants bigger companies to get involved in the process. El-Rufai invited investors into the state to explore Gold deposits in Birni Gwari, something that no state governor in the South-South and South-East could do as regards the huge crude and gas deposits in their arrears. Are we living in the same country with different rules? Does it mean that the proceeds from the mining of Gold in Zamfara, Kaduna, Niger, Taraba are going into the pockets of the state governments and not the federal government that owns all minerals in Nigeria?

Again, according to the Federal Government in its decision to ban mining activities in Zamfara on Sunday, the acting IGP said: “Consequently, any mining operator who engages in mining activities in the affected locations henceforth will have his licence revoke,”.

“All foreigners operating in the mining fields should close and leave within 48 hours.”

There have been reports of kidnap of foreigners in Kaduna, Zamfara, Kano and other places. It was observed that these foreigners were the ones helping with these mining activities. The huge question is who are the ones benefiting from these mining activities? The elites or the state governments? Why are the proceed from these activities being underreported?

We cannot as a nation maintain double standards on issues of national resources’ rights.


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