Revamping Nigeria’s Solid Minerals Sector

The solid minerals sector in Nigeria has long been viewed as a potential source of substantial revenue, particularly in light of the declining income from oil and gas. There was optimism for revitalising traditional revenue sources from solid minerals, such as tin and coal. Nevertheless, the underwhelming revenue stream in the sector has been attributed to outdated policies and laws, as well as a lack of reforms. The Nigerian Minerals and Mining Act of 2007 was enacted to govern the exploration and exploitation of solid minerals in the country and to make provisions for ownership, control, administrative functions, and environmental considerations.

Despite the enactment of this Act, the actual implementation and outcomes of the sector’s reforms have been unsatisfactory. According to the 2023 Fiscal Framework, the total solid minerals revenue for the Federation Account was only N6.312bn in 2021, N6.944bn in 2022, and an expected N8.680bn in 2023. These figures clearly indicate that the expected results from the reforms have not been realized, and there is a noticeable lack of a comprehensive plan to make the reforms effective.

It is also apparent that major mining companies have not made substantial investments in Nigeria’s solid minerals sector. While there are reports of ongoing mining activities across the country, the revenue generated from these activities is disproportionately low compared to the sector’s potential. Moreover, the mining activities have resulted in adverse effects, such as lead poisoning and fatalities, underscoring the urgent need for stricter regulations and enforcement.

Furthermore, the establishment of the Environmental Protection Rehabilitation Fund, as outlined in the Act, has not been adequately addressed. Despite the budget allocation for the reclamation of abandoned mining sites, there is no certainty that the fund has been established in accordance with the Act’s provisions. This gives rise to concerns about the effectiveness of environmental protection measures and the responsibility of mineral extracting companies in remediation efforts.

In light of these challenges, it is imperative for the Nigerian government to review the implementation of the Act and ensure that its provisions are upheld to achieve the desired outcomes. This entails appointing competent leadership for the ministry, addressing policy, infrastructure, and financial challenges, and drawing lessons from the successful strategies of other countries in generating solid minerals revenue.

In conclusion, the reform of Nigeria’s solid minerals sector is crucial for increasing revenue streams and ensuring sustainable exploitation of mineral resources. By addressing the shortcomings in the current implementation of the Act and drawing on global best practices, Nigeria can unlock the full potential of its solid minerals sector as a significant contributor to the country’s economy.