How Zamfara gold mining resurrected clamour for resource control by oil producing states

THE Presidential Artisanal Gold Mining Development Initiative (PAGMI) was conceived by the Federal Government as a means of transforming the country’s abundant, largely untapped gold deposits into a major source of revenue for the country.

But controversy surrounding the establishment of a gold reserve by the Zamfara State government, and reports of the purchase of gold from the state by the Central Bank of Nigeria under the PAGMI arrangement, has resurrected the age-long clamour for resource control by oil producing states of the Niger Delta.

PAGMI is a comprehensive artisanal and small-scale gold mining development programme, launched in 2019 to foster the formalisation and integration of artisanal, or illegal, gold mining activities into Nigeria’s legal, economic, and institutional framework. It w‎as ‎designed as a broader strategy to address the structural and institutional factors such as rural poverty, lack of alternative livelihoods, and difficulties in meeting legal and regulatory requirements that tend to push artisanal gold mining operators deeper into the informal economy.‎

‎The provision of access to markets for the artisanal miners through a National Gold Purchase Program and the deployment of enhanced mining methods at artisanal and small-scale mining sites are to serve as ‎catalysts for the planned integration.

‎In line with the National Gold Purchase Program, the ‎Central Bank of Nigeria will be purchasing gold that has been mined, processed and refined under the Presidential Artisanal Gold Mining Development Initiative for use as part of Nigeria’s external reserves.‎

Offering more insight on PAGMI, the Federal Ministry of Information and Culture, on its website, explained, “‎PAGMI will deploy safer and more efficient mining and processing technologies across artisanal mining locations across the country, starting with Kebbi and Osun States as the Pilot States with intervention in Kaduna, Zamfara and Niger States to commence immediately after the Pilot.

“Using a Centralised Off-take and Supply System supported by a Decentralised Aggregation and Production Network, PAGMI will buy all the gold produced by artisanal and small-scale miners and aggregated by licensed buying centers and aggregators for supply to the Central Bank of Nigeria.”

A major feature of PAGMI, the biometric data capture and enrolment exercise for artisanal miners, kicked-off in Yauri Local Government Area of Kebbi State in February.

However, controversy is trailing the implementation of PAGMI after the announcement by the Zamfara State government that it had established a gold reserve was followed by reports that the CBN is to purchase N5 billion worth of gold from the state government.

‎Under the PAGMI arrangement, the CBN had, earlier in July 2020, paid the sum of N268m for 12.5kg of locally mined gold bars.

Also, in August, 2020, Zamfara State governor, Dr. Bello Matawalle, visited the Presidential Villa, Abuja, to present gold bars mined in the state to President Muhammadu Buhari.

‎Then, in October 2020, Matawalle announced, at a press briefing in Gusau, that Zamfara has established a ‘gold reserve’ with gold that was, reportedly, entirely mined and refined by artisanal miners in the state. The gold reserve, the first of its kind in Nigeria, was launched with 31kg of processed gold that is to be deposited in a bank.

The governor explained that the establishment of the gold reserve would boost the economy of the state.

“My administration will subsequently continue to buy gold from our local miners so as to gradually improve the reserve. ‎Even though our state, like other states of the Federation, is grappling with competing demands from the public, the resources at our disposal are meagre. We feel it is of utmost significance to invest in the future of our people.

“The establishment of the gold reserve, therefore, is part of the relentless efforts by my administration to diversify the state’s economy by exploring all potentials of the state, and maximally utilising them for the benefit of the present and future generations,” Matawalle said.

Going by the PAGMI arrangement, it is expected that the CBN will purchase gold from the ‘gold reserve’ of the Zamfara State government.

The Federal Government had banned mining activities in Zamfara after illegal mining by artisanal miners was linked to the banditry in the state. But Zamfara State Commissioner for Finance, Rabiu Garba, while shedding further light on the ‘gold reserve’, noted that “When the ban is lifted and mining activities resume fully, we (Zamfara State government) are hopeful that we will be receiving royalties from miners while the Federal Government will also be giving us something”.

Governor Bello Matawalle of Zamfara State and President Muhammadu Buhari at the State House, Abuja.

However, the entire arrangement, which appeared to have given Zamfara State ‎the powers to control the gold resources in its territory, has become a cause for concern among the oil producing states of the Niger Delta, whose oil and gas resources have been the mainstay of the Nigerian economy for years.

Wondering why the PAGMI programme would allow Zamfara to control its gold deposits while the oil in the Niger Delta is shared by the entire nation, leaders of the oil producing states were quick to point out that the situation concerning Zamfara gold was unconstitutional, as it violated provisions of the Nigerian Minerals and Mining Act, 2007.

The Nigerian Minerals and Mining Act, 2007, stated that “All mineral resources in, under or upon any land in Nigeria, its contiguous continental shelf and all rivers, streams and watercourses throughout Nigeria, any area covered by its territorial waters or constituency and the Exclusive Economic Zone is and shall be vested in the Government of the Federation for and on behalf of the people of Nigeria”.

Also, mining and mineral resources, just as oil, was listed in the Exclusive List, under the exclusive control of the Federal Government, in the 1999 Constitution.

The Niger Delta region is crying foul over the PAGMI arrangement which appeared to have given Zamfara State control of gold deposits in its territory.

Addressing journalists in Asaba on November 11, Delta State governor, Ifeanyi Okowa, stressed that no law in the country gave Zamfara State the powers to manage and control gold deposits in its territory.

Delta State governor, Ifeanyi Okowa
Delta State governor, Ifeanyi Okowa

Insisting that the establishment of the gold reserve by Zamfara State was illegal, Okowa warned that if the matter was not addressed, governors of the South-South‎ states would follow suit by assuming control of oil and gas resources in their states.

Resource control‎ will be top on the agenda of a meeting of South-South political leaders, include governors, ministers, lawmakers and other stakeholders, which is to hold in Port Harcourt, according to Okowa.

The Delta State governor observed that the actions taken by Zamfara State suggests that the country’s laws are being applied in a discriminatory manner, with Zamfara’s gold being for the state why the oil in the Niger Delta belongs to the entire country. ‎

Okowa said, “South-South governors have been talking about the need for restructuring and need for resource co‎ntrol. Obviously we are on that because we feel there is the need to restructure not only the country, but the management of resources. ‎

“As at today, there are Acts in the National Assembly that guide the issue of oil production and with the solid minerals, those are not covered in these Acts and this is already a sore point in our nation’s governance system and we hope to express this very strongly during the meeting taking place in Port Harcourt.

“We cannot apply laws in our nation to the point that it becomes discriminatory because if people are allowed to process for their solid minerals, others should also be allowed to do same for their oil. So we are going to be very hard and make our voice as strong as possible during the meeting. I believe that these discriminatory tendencies will have to be revisited in our na‎tion at some point in time.”

Earlier, in October, two youth groups in the Niger Delta – South-South Youth Assembly and Young Democratic Movement – had issued an ultimatum to the Federal Government, demanding that the proceeds from the gold bought by the CBN from the Zamfara State government should be shared among all the states, as is the case with oil and gas.

The groups, while addressing journalists in Uyo, Akwa Ibom State, insisted that the gold found in any state belongs to the Federal Government. “The revenue generated from such mineral resources ‎like gold is to be shared among all the 36 states and the Federal Capital Territory,” they said.

“The (Zamfara) state governor‎ has no such audacity to sell the gold bars to the apex bank worth close to about N5bn. In the Niger Delta states we don’t sell oil. We are surprised that a governor of a state should be selling gold bars from Zamfara State to the CBN. Let it be known that whatever revenue that ought to come from that transaction belongs to the entire country and not the state government,” the Niger Delta youths said.

The Niger Delta youth groups warned that the action of the Zamfara State government, if not addressed, could jeopardise ‘the relative peace in the region and the achievement of 1.86 million barrels per day in oil production’.

The Niger Delta youths also demanded an upwards review of the 13 percent derivation from the Federation Account for oil and other minerals producing ‎states, stressing that failing to do that, “the Federal Government must allow the Niger Delta to directly sell her oil just as the recent case of Zamfara gold”.

In addition to the issues raised by the oil producing Niger Delta states, a lawyer, Silas Onu, had petitioned the CBN to point out the illegality of the purported purchase of N5 billion worth of gold from the Zamfara State government by the apex bank.

In the petition, Onu described the transaction as “the highest insult on the sensitivities of Nigerians”, adding that “The Zamfara State government has no gold to sell, the gold is for the Federal Government, and CBN is not permitted by its enabling Act to engage in the business of buying solely commercial goods”. Citing section 1(4) of the CBN Act, 2007, the lawyer said the law that permits the apex bank to acquire, hold and dispose of movable and immovable property does not extend to engaging in a business venture such as the purchase of gold.

Onu also stressed that management and control of gold deposits in Zamfara by the state government was contrary to the provisions of the Nigerian Minerals and Mining Act, 2007.

Reacting to the controversy trailing the establishment of the gold reserves by the Zamfara State government, the Ministry of Mines and Steel Development said the state government should ‘get their narrative right to the public’ and desist from giving the impression that the gold in its territory belongs to the state.

Minister of Mines and Steel Development, Olamilekan Adegbite, who said he discussed the matter with the Zamfara State government, said, “We have what we call private mineral buying centres, we issue licences; in fact, anybody that is interested should come to us and once you meet the criteria, we give you a licence to purchase the mineral and that is the angle the Zamfara government is exploiting.

“From their own fund, they are buying gold from their people and I spoke with the governor, you need to explain these to the people properly. It is not as if they are cornering the resources that belong to the Federal Government. All mineral resources in the country is vested in the Federal Government and that is in the exclusive list and that stays. And the right royalty should be paid to the Federal Government.

“People feel that some parts of the nation are cornering the wealth of the nation. Everybody has partaken in the lunch of the Niger Delta, we have taken from the oil and gas and it has been used to develop this country and the mineral wealth of this country will also be used collectively to develop this country and not exclusively by one region.”

On its part, the Zamfara State government said there was no trade deal on gold between it and the CBN. The state government also explained that it does not directly mine the gold for itself, but purchases the commodity from Federal Government-registered mining companies in the state. But the explanation appeared to contradict initial reports that the gold in the state’s reserve was purchased from artisanal miners.

“The state government is not directly mining the gold for itself. It will rather purchase the gold from the Federal Government-registered mining companies in the state,” Zailani Baffa, spokesman to Zamfara State governor, said in a statement.

However, for Onu, the lawyer that petitioned the CBN over the ‘gold deal’, the explanations given by the Zamfara State government and the Ministry of Solid Minerals Development hold no water.

Speaking with The ICIR on Saturday, November 14, Onu said he would go to court over the matter. ‎

He said, “There has not been any response from the CBN to the petition. I am thinking of sending them a reminder before I do any other thing. I am thinking of taking the matter to court because the action of the Zamfara State government is in breach of the 1999 Constitution and the Nigerian Minerals and Mining Act, 2007. I want to get a declaration from the court that the action taken by the state and the CBN is illegal. A state cannot be dealing with solid minerals as if it belongs to them and the CBN is encouraging that. The money (for the purchase of the gold) is apparently going into the coffers of the state government.”



    Picking holes in the explanations given by the Zamfara State government and the Ministry of Mines and Steel Development, Onu added, “What they claim is that the artisanal miners will mine this gold locally and the state government will buy the gold from them so as to prevent bandits from getting hold of the gold, then the CBN will buy it from the state government. This will totally remove any role or presence of the Federal Government in the whole process. So how does the Federal Government now benefit from the gold that is in Zamfara State? This therefore means that it is only the artisanal miners and the Zamfara State government that will benefit. They tried to give explanations but to me it did not fly.”

    The lawyer stressed that what is good for a gold producing state like Zamfara in the North should also be good for the oil‎ producing states in the South.

    Onu said, “They are allowing artisanal miners, which is another word for illegal miners, to mine gold in Zamfara State. Are they also going to approve exploration of oil by illegal oil bunkerers in the South? What is good for the North should also be good for the South.”‎

    Meanwhile, issues surrounding the mining of gold in Zamfara would be the focus of a meeting of six governors of the South-South region, under the aegis of the Forum of South-South Governors, in Port Harcourt, Rivers State, Monday November 16.

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