Attracting the World Bank's
sponsorship for a project is normally a Herculean task for a
developing country like Nigeria because of the strict
conditions. But even more difficult is doing enough on a
project to earn the bank's commendation.
But in the case of Nigeria’s
mining industry, the story has been different.
Maybe because the World Bank
first approached the Nigerian Government with the project
and since the Sustainable Management of Mineral Resources
Project in the Ministry of Mines and Steel Development got
underway, the bank had somewhat determined how the $120m
credit is managed.
To free it from bureaucratic
problems or even ministerial meddlesomeness, a special
project management unit was set up, with the staff as either
direct World Bank’s employees or consultants.
And before deciding any
project to be embarked upon and get the funds released,
series of meetings are convened between officials of the
Ministry of Mines and Steel Development and PMU, while the
World Bank officials in Washington reserves the final
approval authority.
At the Mid Term Review of
the project which held between April 27 and May 9 in Abuja,
it was all praises for the country and the project
management team.
Investigations conducted by
our correspondent indicated that preparations for the
project, which had the World Bank advancing Nigeria a credit
of $120m, started on March 22, 2004 and ended on November
10, 2004.
The negotiations took place
on November 11, 2004 while the World Bank’s Board gave its
approval on December 14 2004.
On January 24, 2005, both
parties signed the Credit Agreement, paving the way for the
four-year project to become effective the following day,
April 25, 2005.
The goal of the project is
to revamp the Nigerian mining sector so as to diversify the
nation’s sources of income and get the country out of the
oil trap.
Years before independence,
the mining sector was a major source of earning for the
country.
Unfortunately, it suffered a
decline because of the plummeting of prices of solid
minerals in the international market, government change of
priorities and the increase in the resources that accrued to
government from oil.
With this background, the
project set out to achieve economic development and
livelihood diversification for artisanal and small scale
mining areas, strengthening governance and transparency in
mining, private sector development and project coordination
and management.
According to the Director of
the project, Mr. Linus Adie, the $120m credit has a 30-year
repayment term and only a 0.75 per cent commission is
charged.
He said, “This is the
largest World Bank mining project not only in Africa, but in
the whole world. It came immediately after the Extractive
Industry Review.
Because mining is
destructive, the World Bank at a time refused to give
assistance to any mining project. But they reviewed it and
brought in some safeguards. These safe guards are being
tested in the project at the moment. This has encouraged the
bank to continue the project in other countries.”
At the beginning, the
mid-term review was enshrined to help ascertain the state of
the sector before the commencement and progress so far made.
The review was also intended
to buttress lessons that have been learnt and adjustments
that may be necessary to achieve the objectives and the
various indicators that can be used to access the
performance.
The review was carried out
by Task Team leader, Mr. Craig Andrews, Operations Officer,
oil, Gas and Mining and Chemical Department, Miss Alexandra
Pugachevsky, and Lead Procurement Specialist, Chief Bayo
Awosemusi.
Others who participated in
the mission included Procurement Specialist, Mary Asanato,
and Operations Officer of the Abuja Country Office of the
World Bank, Mr. Ikemefule Anwanwu.
Speaking at an event held in
the course of the review sessions, Andrews observed, “On the
10 stipulated performance indicators, this project has
already fully accomplished six. We have additional work to
do, especially in stimulating non-farm income and developing
artisanal and small scale miners. We have four indicators
for those activities and we will have discussions on how we
can achieve them.”
In his summary of the
implementation process, a copy which our correspondent
obtained, Andrews listed the progress made by the project to
include the on-going airborne geophysical work which aimed
to cover 66 per cent of the country, rehabilitation of the
ministry’s central office, continuing rehabilitation of the
zonal offices, anticipated commencement of geo-chemical
mapping and work at the Nigerian Institute of Mining and
Geosciences.
Other developmental work
which he attributed to the World Bank’s credit facility
included commissioning of the Mining Community Outreach
Centre in Jos and various studies of the small scale and
artisanal mining sector.
He also took note of the
preparation of a proper regulatory environment to guide the
smooth operations of the Mining Cadastre Office and the
transparent issuance and management of mineral titles as
right steps being taken under the project.
Andrews also recorded that
“The project over the last several months had laid an
excellent foundation to deliver technical support to the
artisanal and small scale miners, especially the
refurbishing of equipment and classrooms at the Jos School
of Mines.
He, however, demanded that
the project be accelerated in certain areas, including the
aspects that aimed at artisanal and small scale mining.
“Improving the performance
of the ASM sub sector is critical in order for the project
to achieve its second fundamental development objective;
increasing non-farm incomes in rural areas,” he said.
He also canvassed that the
project be made to move swiftly over the next several months
to deliver courses and training for artisanal miners while
the small grant programme as provided for in the credit
agreement should be activated.
In line with the
recommendations, the Project Management Unit swung into
action in the past three months especially as it concerns
the $10m which was specifically put aside to serve as loan
for the development of the artisanal and small scale miners.
In July, the unit began to
prepare the miners to receive these grants.
First, they were made to
form cooperative societies which are the forum through which
the funds will be disbursed and about 400 of such
cooperatives have been formed.
According to the Coordinator
of PMU, Mr. Linus Adie, “We have started talking to the
cooperatives. We are training them on how to manage their
funds, how to investigate and give them the necessary
extension services. We will also encourage banks to
appreciate the mining industry and give the miners some
sustainability. As such we are preparing another course for
the banks, to give them the rudiments of mining.”
At an event in July in Jos,
miners from all the country were introduced to the criteria
and other modalities guiding the operations of the credit
facilities.
Our correspondent gathered
on Friday that a National Coordinator had been appointed for
ASM operations, hence the recent advertisement requesting
registered mining cooperatives and associations, businesses
and companies with small scale mining or quarry lease and
community development associations to apply for the loan.
Aside an general
recommendations, the review team also sought the adjustment
to the project’s expenditure matrix and implementation
timetable.
According to Andrews, “The
adjustment pertains to approximately $50m of project fund
which remains un-disbursed and uncommitted. The task team
requires an official request from the Nigerian authorities
to reallocate the categories of expenditure for the
project.”
The task team also conceded
to the request by the Minister of Mines and Steel
Development, Chief Sarafa Isola, for the World Bank to
extend the credit for two more years and have the
termination deadline to coincide with the life span of
President Umaru Yar’ Adua’s administration.
He claimed that extending
the project will enable it lay a solid foundation in the
sector and allow the private sector to spearhead further
development of the sector.
According to Andrews, “The
MTR recommends that the closing date of the project
currently June 30, 2009 be extended by 18 months to December
31, 2010.
Project performance was
nearly suspended for approximately six months in 2006 to
early 2007. Additionally, changes in ministers prior to and
during the elections process delayed implementation of the
project. The delays were independent of the control of the
project management team. Additionally, achieving the second
development objective requires extensive work with the
artisanal and small mining sectors.”
He further indicated that
although the project was making significant progress on ASM,
the complexities of the issue were such that additional time
was required to achieve satisfactory results. “It is
recommended to wait until early 2009 to request the
extension in order to assess progress at that time to
achieve the development objective,” he concluded. |
