The Nigerian Mining Sector: A Closer Look at Recent Developments
The Nigerian economy has long been heavily reliant on the non-oil sector, with its contribution to the Gross Domestic Product (GDP) reaching 94.34% in the third quarter of 2022. In contrast, the mining sector’s contribution to the GDP was recorded at just 0.3% during the same period. Despite this seemingly insignificant figure, the sector has witnessed gradual growth in various aspects, including revenue generation, technological advancement, improved regulation of illegal mining activities, and increased global visibility.
In November 2022, the Federal Government of Nigeria (FGN) generated ₦3.99 billion from mineral and mining activities, exceeding the prorata target of ₦2.19 billion for the period. However, it is clear that further efforts are required to drive the sector towards sustainable growth and establish Nigeria as a significant player in the global mining industry.
Recent developments in the Nigerian mining sector have had a notable impact on the economy. The Federal High Court (FHC) recently affirmed the Federal Inland Revenue Service (FIRS) as the primary authority responsible for the assessment, collection, and enforcement of mining-related duties and taxes. This decision reinforces the statutory role of the FIRS in regulating the sector, bolstering confidence among both domestic and international stakeholders.
As the nation endeavors to diversify its economy and reduce its dependence on oil, the mining sector presents substantial opportunities for growth and development. Enhancements in governance, data collection, and inclusivity, particularly in terms of gender representation, are vital in ensuring the sector’s long-term success.
In conclusion, while the Nigerian mining sector may currently constitute a small fraction of the country’s GDP, its potential for growth and its impact on the economy should not be underestimated. With appropriate policies, investments, and regulatory frameworks, the sector can play a crucial role in advancing Nigeria’s economic landscape.
For more comprehensive insights into the recent developments in the Nigerian mining sector, please refer to the article released by KPMG in Nigeria in February 2023.
