How To Create 10 Million Jobs In The Nigerian Solid Minerals Industry
The unemployment rate in Nigeria has continued to experience a fast-rise in recent years, with youth unemployment accounting for over half of the unemployed citizens; meaning over 50 million Nigerians stand technically unemployed since the youth make up more than 50% of the country’s population.
Africa as a whole is not left out of this as out of the 13 million youths that enter the labour market each year, only 3 million, which is about 33% of the African youth, are in standard employment, with the rest either underemployed or vulnerably employed.
How then can more jobs be created for a vast number of youths who will invariably leave their universities every year to join an ever-growing labour force that has little to no opportunities to turn their lives around?
One way to answer this is to look at the solid minerals industry, with a focus on Nigeria.
Blessed with immense natural resources, common sense warrants that Nigeria should be one of the top 5 wealthiest countries in the world. But unfortunate mismanagements have caused the country to drift into mayhem and degrading levels over the past 56+ years.
To create jobs for an ever-growing unemployed labour force, paying attention to revamping the solid minerals industry can account for the creation of 10 million jobs in as little as two years in Nigeria.
Here’s what can be done:
1). Establishment Of Mining & Export-Focused Schools:
The first step to job creation in the solid minerals industry is to build upon skill acquisition programs. Quality vocational training centres should be set up in every state in Nigeria, with each state possibly having multiple centres.
These centres would go on to train people on highly-focused skills that are critical to the success of not just the mining of solid minerals and its value chain, but also on effective lead generation for acquiring international clients whom would either buy the mined commodities or its processed form from people operating in the sector.
The first benefit of setting up these centres across the 36 states is that it creates jobs for the skilled individuals who would run and manage the different departments of the centres, after which the centres would go on to become the building blocks that will train the generation of individuals who would build upon what they’ve learnt, apply it in the solid minerals industry, and facilitate exports that will not only contribute positively to the Nigerian GDP but will also create millions of jobs in the process.
2). Establish A Network Of Sophisticated Mineral Testing Laboratories:
One of the reasons a lot of people shy away from buying mineral resources like Zinc, Copper, and more for export is that after the miners give their lab report and the exporter has fully paid for the product before shipping down to Lagos for a re-test before export, the final SGS test may determine that what was purchased is practically not what it was claimed to be, and retrieving the paid sum from the miners becomes a major problem as they suddenly become elusive.
To ease this problem and create a more credible export process, SGS standard test centres should be available in all 36 states for all types of solid minerals testing. This will not only create jobs for people who would work in all these centres but would help improve the quality of products that are mined and exported from the country, leading to increased purchases from international buyers, which invariably creates more jobs for the mining-to-export supply chain process.
3). Establishment Of Processing Facilities Across The Different Available Minerals:
Metallic ores can be further processed into multiple alloys before being exported to international buyers, which would cause the exporters’ income to become even far higher since it’s not just the ore or concentrates that are been exported.
The good thing about processing is that it creates jobs for hundreds of people at any given time an ore is being processed for export.
Depending on what volume in terms of metric tonnes that an international buyer has requested to buy, the number of people who may work in a facility to process the ore to alloys could be anywhere from a few hundreds to over 5,000 people.
If 100 companies are preparing shipments in an average of 10,000 metric tonnes capacity for export, they’d each have to employ at least 1,000 people to run the processing operations, causing a minimum of 100,000 people to be in employment every month.
With more companies processing and exporting large volumes of solid mineral products to international buyers at any point in time, millions of people could be in direct employment in the various facilities at all times.
4). Establishment Of Modern And Up-To-Date Mining Support Services:
Mining support services involve the provision of mining equipment for use, trucks for transportation, and much more to make the mining process a lot easier.
For instance, if an order for the mining of 1,000 Metric Tonnes of Mica is in place, about 100 people would be working on the mine together with excavating machinery to have the Mica mined on time, while another set of people would be involved in the washing process, another set with the bagging, and also 33 trucks would be used to transport the Micas from the mines to the shipping point.
This process itself could lead to the employment of up to 300 people in the entire chain if the shipment is to happen as quickly as possible and on time to always meet monthly deadlines.
But when tools to make the mining process easier are out of place, more people than regular wouldn’t just work in the mines but would use poor practices which would cause the specifications of the exporter difficult to meet. His or her deadlines would also be greatly affected, meaning it would be extremely difficult to deliver on time to the end international buyer, causing contracts to get cancelled a lot.
The government could provide access to mining support services that don’t just accelerate the mining process but is also more affordable than both traditional time-wasting means and companies who exploit miners with their services.
The government could do this by either setting up a parastatal which focuses on providing widespread mining support services to miners across the country or could focus on empowering companies who can provide these services with the means to do so, so that they can offer the services at reduced costs, while keeping the exporters’ integrity with their exit international buyers intact.
5). Restructure Procedures For Accessing Export Finance:
Export finance is critical to facilitating the growth of the solid minerals industry since if exporters cannot have access to finance to mobilise miners to mine the solid minerals their end international buyer needs, the mining industry will not experience growth. But despite all quarters knowing how critical this is, they refuse to still make the finance-access process easy to attain, but instead make requests for collaterals and more from exporters who have qualifying end buyers on the other end.
Instead of frustrating exporters, one solution to making access to finance possible is to provide finance to the exporter if he or she can meet all of the four things below:
- The international buyer has issued an Irrevocable Corporate Purchase Order (ICPO).
- The exporter has a signed supply contract with the buyer with the contract procedure clearly stated.
- The exporter has identified mines that can produce the required volumes the international buyer needs.
- The international buyer is willing to place an irrevocable Letter of Credit from a top 50 rated world bank.
These should be enough to cause a bank to provide export finance to an exporter because an irrevocable letter of credit is a bank guarantee of payment once the supply has been done or a condition has been met. Meaning the exporter’s bank liaises with the buyer’s bank to automatically get the payment for the goods once the supply is successful.
Ensuring the right mine has been identified by the exporter is also critical as this ensures they’re going to be exporting the exact specification the international buyer wants as stated in the contract.
With these in place, export finance should be easily accessible to any qualifying exporter instead of asking for ridiculous requirements, as providing widespread finance to people within these above-mentioned conditions would not just facilitate more exports from Nigeria, but would invariably create millions of jobs in the entire value chain.
6). Special Government Incentives Should Be Provided For Companies Operating In The Industry:
While the Nigerian government may be providing incentives to companies on the importation of mining equipment, more incentives like tax cuts and much more should be provided for the solid mineral industry.
As earlier mentioned, easier access to finance should be provided, including grants in special cases and tax holidays/cuts for first-time exporters or exporters operating within a certain export margin. This way, they’d have more funds to invest in their businesses and will employ much more people in the process.
7). Fraud and Corrupt Practices Should Be Curbed At All Levels:
All that’s mentioned above will have no success if corruption in the industry is not just curbed, but eliminated to a degree spanning over 80%. When corruption is fiercely attacked, more funds would go to what they’re meant for, which would drive growth and development in the industry.
Public and international awareness should also be widespread to enable international buyers to know how to better identify legitimate exporters. The reason is if they all have a notion that every Nigerian they speak to is a fraudster, a lot of prospective clients would move on to buy from other countries, which would cause whatever local development the solid mineral industry experiences to be of little value since no one is actually buying.
By focusing on building a credible image for the country on the international global trade scene through proper education and provision of easy access to information that can make international buyers make safe purchases from Nigeria, our international reputation would gradually improve and more people would go on to purchase much more products from the country. Which means millions of jobs would invariably be created to support the rising export demand in the industry.
To Sum It Up
Job creation is no easy task, as it involves a lot of sacrifices which very little people either don’t have the know-how to execute or are simply unwillingly to do. It’s a systematic process that takes time to build upon, but when followed through, can yield positive results.
It is no mistake that landlocked countries with no mineral resources like Switzerland is one of the top 10 richest countries in the world, but resource-rich countries like Nigeria remain in turmoil. Unless we can painstakingly do what needs to be done and follow it through till the end without looking for short-cuts to success, we’d get closer to attaining our goals with every passing day, week, month, and year.
About The Article
This is an opinion and analysis posted by Stan Edom, a Nigerian citizen and Editor In Chief of Startuptipsdaily.com.
The Opinion and Analysis section is committed to nation building efforts through empowering expert writers to air their views on the best ways to solve national issues and move nations forward.
Opinions and Analysis will be published every Friday.
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