Attracting Foreign Investors: Nigeria Lowers Production Costs to Boost Mining Sector

The Government of Nigeria is actively pursuing measures to attract foreign investors to the country’s mining sector. Dr. Dele Alake, the Minister of Solid Minerals Development, reaffirmed the government’s dedication to creating an advantageous business environment and reducing production costs for potential investors during the “Mines and Money Conference” in the United Kingdom.

Alake emphasised the unique benefits of investing in Nigeria, highlighting the lower production costs associated with surface mining and the considerable untapped mineral reserves valued at billions of dollars. He referenced a recent report by audit firm KPMG, which revealed a significant increase in the mining sector’s contribution to Nigeria’s Gross Domestic Product (GDP), rising from 0.3 per cent to 0.85 per cent in 2022, indicating a noteworthy 0.63 per cent year-on-year growth.

Nigeria boasts an abundance of over 44 distinct mineral types available in exploitable quantities across more than 500 locations. Alake also mentioned the country’s recognition of the global significance of lithium, noting its addition as a crucial strategic mineral.

Under the leadership of President Bola Tinubu, the government has implemented reforms aimed at enhancing investment by simplifying procedures and reducing barriers to attract foreign investors. The announcement of fresh data obtained through the Airborne Geophysical Survey and a Memorandum of Understanding with German firm Geoscan further emphasised the government’s commitment to providing necessary information to potential investors.

In addition, the Minister highlighted the access to funds through a new funding facility inaugurated by the Africa Finance Corporation and the Solid Minerals Development Fund, creating an attractive incentive for investors. He also stressed the government’s policies on ensuring that mining operations benefit local communities and lead to processing rather than wholesale export of raw minerals.

Nigeria’s emphasis on Solid Minerals Beneficiation and Value-Addition as a means of achieving quick and sustainable growth in the Mining Industry was also a key point. By adding value to raw materials, the country aims to create higher value products, generate employment opportunities for its youth, and increase the mining sector’s overall profitability and contribution to the nation’s GDP.

Furthermore, Alake urged investors to contribute to the socio-economic development of the communities where they intend to mine in order to make mining mutually beneficial. He referenced the recent inauguration of revised guidelines for Community Development Agreements, which includes provisions for social amenities, educational support, and health and safety environmental facilities.

In conclusion, the Nigerian government’s efforts to attract foreign investment in the mining sector are evident through various reforms, incentives, and commitments to sustainable and mutually beneficial practices. The country’s vast mineral resources and the promise of a conducive business environment and lower production costs make Nigeria an attractive destination for foreign mining investors.