By Salisu Na’inna Dambatta

The recent exchanges between the Northern Elders Forum and the Minister of Solid Minerals Development on the appropriateness of locating a gold refinery in Lagos or not were healthy. It was a call for entrenching economic democracy and reflects the diversity of interests in  Nigeria.

In the University of Toronto Quarterly  July 1942 edition, Professor C. B. MacPherson described Economic Democracy as “an economic order which would make possible the realization of the purposes or values which political democracy can no longer realize by itself.”

His definition alluded to the perception that political democracy has shortcomings like engineering economic distortions, partisan selfishness, lopsidedness in allocating resources or denial of equitability.

The Northern Elders Forum believed such distortional factors in political democracy facilitated taking away gold mined in the North to Lagos for refining, value addition and trading, with all the economic benefits attached. This type of distortion is what Professor J.W. Smith calls “Mathematical Waste” in his book tagged Economic Democracy: the Political Struggle of the 21st Century.

The waste in the context of this article has nothing to do with resource-control. It is about the uneconomic cost of transporting raw gold and associated dirt to Lagos for refining and paying fees to actors in the process, instead of paying it to those who laboured in the gold mines.

The Nigerian Geological Survey Agency and the Nigerian Metal Exchange reported that gold is found in 17 states, but most prominently in Maru, Anka, Malele, Tsohon Birnin Gwari-Kwaga, Gurmana, Bin Yauri, Okolom-Dogondaji, and Iperindo in Osun state.

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Sadly, records indicate that previous formal gold mining in colonised Nigeria from 1913 to 1942  hardly benefited communities in the endowed areas. This should now be avoided through economic democracy.

Experts said that the proven gold deposits estimated at 600,000 tons can yield over USD90 billion when extracted and refined. The money can finance projects aimed at improving the well-being of  Nigerians.  Cement makers locate their factories where limestone, the main raw material for cement manufacturing, is found.

To achieve maximum viability and returns on investment in the gold mining, refining and marketing value chain, a dual refinery option is essential, considering factors like proximity to raw materials,   infrastructure and security.

The importance of proximity to the gold mines makes it logical to locate one of the refineries in Kano or Kaduna, or in Zamfara state.  Doing so will be economically appropriate and vital for a balanced national development. It will be a win-win situation for both the Lagos group and the Northern Elders Forum.

The twin refinery option will contribute in formalising the unlicensed gold mining,  which the Nigerian Mineral Exchange says costs the Nigerian Treasury over ₦300 billion annually in lost revenue.

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It may be recalled that the federal government in 2023 commissioned a Gold Souk in Kano for making gold earrings, necklaces, pendants and other low-end consumer items.

However, processing the raw gold into bullions for export can yield more revenue for the country, as evidenced by the activities of Dukia Gold miners and refiners. The Central Bank of Nigeria (CBN) may equally procure the bullions to increase our country’s dismal 22.1 tones gold reserves.

Locating a gold refinery in Kaduna, Kano, or Anka could reduce the cost of transporting heavy gold-bearing dust from the mines in the North to Lagos. It would also make it easier for a consistent and timely supply of feedstock to the refinery.

Either of the International Airports in Kaduna and Kano will provide secure routes for exporting refined gold by air, just as the Murtala Muhammed International Airport, Ikeja.

The Ministry of Solid Minerals Development should listen to the views of the Northern Elders and muster the political will to operate the Nigerian gold industry on the basis of economic democracy to spread prosperity nationwide.

Dambatta, a senior media professional, writes from Kano