Stories by Adewale Sanyaolu
The recent report released last Monday by the National Bureau of Statistics (NBS ) that the number of unemployed Nigerians rose by 2.1 million to 11.55 million at the end of 2016 from 9.48 million at the beginning of the year was quite alarming.
The NBS report stated that the unemployment rate was highest for persons between the ages of 15 and 34, which represents Nigeria’s youth population.
The unemployment figure becomes more worrisome considering the state of neglect of the country’s solid minerals sector, which is said to be capable of providing over 500,000 direct and indirect jobs.
A study commissioned by the United Nations Industrial Development Council (UNIDO) led by a former Vice Chancellor of the University of Ibadan, Prof. Femi Bamiro, had proved that there are mineral resources in each of the 774 local councils in the country.
Similarly, the Nigerian Extractive Industries and Transparency Initiative (NEITI ) report suggests that there are about 40 different kinds of solid minerals and precious metals buried in Nigeria’s soil waiting to be exploited. The commercial value of Nigeria’s solid minerals is estimated to run into hundreds of trillions of dollars, with 70 per cent of these buried in the bowels of Northern Nigeria.
But despite these prospects, the Nigerian solid minerals sector has performed below expectation, contributing only 0.3 per cent to the country’s Gross Domestic Product (GDP).
State of solid minerals sector
President of Miners’ Empowerment Association of Nigeria, Mr. Sunny Ekosin, disclosed that Nigeria loses a whopping N8 trillion annually in unexploited gold alone. He also said that Ajaokuta remains the key to Nigeria’s industrialisation and that getting it back to work is a matter of patriotism for President Muhammadu Buhari and his team.
Ekosin had in a recent interview said: “If Nigerians were taking data seriously, we would have built a database where we have authentic information. In 2012, the Permanent Secretary of the Ministry of Mines and Steel said that from our precious metals, specifically from gold exploitation alone, Nigeria is losing N8 trillion ($50 billion) annually.”
Regrettably, he said that at the moment, mining of minerals in Nigeria accounts for only 0.3 per cent of its GDP due to the influence of oil resources. The domestic mining industry, he said, is underdeveloped, leading to Nigeria having to import commodities it could produce domestically, such as salt or iron sheets and billets.
Gemstone business to the rescue
Gemstones are one of the oldest businesses in the world. Gemstones do not usually depreciate in value, which is why the business remains very successful. According to NEITI’s audit findings, solid mineral deposits are spread all over Nigeria, with more deposits in certain areas than others. Over 40 million tonnes of talc deposits have been identified in Niger, Osun, Kogi, Ogun and Kaduna states.
Chief Executive Officer (CEO), Laurel School of Mines, Mr. Tope Adebanjo, said if Nigeria channels the required efforts towards gemstone development, the industry is capable of turning the fortunes of the economy around, maintaining that the multi-billion dollar industry has transformed many economies of the world.
‘‘It is sad that foreigners are dominating the gemstone business and there are millions of youths in the country that are unemployed. The industry is a multi-billion dollar industry. We can make Lagos and Abuja another Las Vegas in Nigeria,” he said.
He, however, said factors affecting investment in gemstone development in Nigeria include lack of capital, market, technology, mineral resources and entrepreneurs, pointing out the need to develop entrepreneurs in Nigeria to take advantage of the enterprising sector.
BoI takes the lead
And to further encourage exploitation of the nation’s vast solid minerals as well as value-addition, the Bank of Industry (BoI), last year, partnered with Laurel School of Mines (LSM) to implement its commodity-based industrialisation strategy in the gemstone sector.
Besides, the partnership will see the two institutions building capacity of 1,600 potential entrepreneurs in the sector before funds are made available for on-lending to successful businesses.
BoI Executive Director, Small Enterprises, Mr. Waheed Olagunju, said the partnership was in line with the bank’s commodity-based industrialisation strategy, which is adding value to the nation’s vast natural resource endowments.
Olagunju, during a Memorandum of Understanding ( MoU) signing ceremony with LSM had said, “we have lots of agricultural resources, solid minerals and oil but solid minerals is the lowest hanging fruit. With gemstones, you do not have to wait like agriculture where you plant to harvest and process. We have gemstones where we can pick them up, add value and within few weeks, make thousands of dollars.”
According to him, the partnership is also coming on the heels of Nigeria’s quest to diversify its economic revenue base. He said the gemstones industry is capable of earning the much needed foreign exchange for the economy.
“The turnaround time is faster in precious stones unlike what we have in agriculture or the petroleum sector. We are going to create a lot of entrepreneurs in this sector. Under the MoU, LSM will be training 1,600 entrepreneurs in eight locations. That means 200 entrepreneurs per location across the country spanning the six geopolitical zones including Lagos and Abuja.
“The training we are embarking on is about $277 per person for three days, which is less than $100 a day. Selection will be done diligently together with the BoI. Basically, the whole idea is to engage the youth to take over what belongs to them,” he said.
Tips on setting up gemstone business
Most of the time, the value of a gemstone is based on supply. Since diamonds are low in supply they are expensive. When you start a gemstone business, you will only be successful if you can overcome the high start-up costs, which can be in the range of N5 million or more, depending on what type of gemstone one deals on.
The following few steps can be followed for start-ups; you need to have patience, time, and money you can invest, choose the type of gemstones you want to sell, find quality cutters and determine your market.
You cannot grow or make gemstones, which means you have to pay to cut gemstones or rough gemstones. This cost can become very high depending on the type of gemstone you are buying. The most expensive are typically diamonds and sapphires while topaz, tanzanite and aquamarines are cheaper.
Finding gemstones
You can travel directly to mining sites in areas such as Myanmar, Sri Lanka or Madagascar to reduce your costs. If you travel, you should have a good eye for quality stones or bring someone who does so that you do not overpay for bad gemstones. The more third and fourth parties you have involved in your transactions, the more you will pay for the gemstones.
In Nigeria, gemstones abound in Osun, Kwara, Kogi, Niger and Kaduna states.
Training/approval
There is need to get proper training and certification before embarking on the business. For instance, all of the gems you export to the US will need certification from the Gemology Institute of America or another outside party while in Nigeria, approval to mine must first be got from the Ministry of Solid Minerals.