Summary
Nigeria plans to grant new mining licences exclusively to companies committed to local processing of minerals. This policy aims to enhance local economic benefits, create jobs, and attract investment through various incentives. The shift reflects a broader strategy to maximise value from the nation’s mineral resources, which currently contribute less than 1% to GDP.
Nigeria is set to implement new guidelines stipulating that only firms planning to process minerals locally will be eligible for new mining licences. This marks a significant shift from the long-standing export-centric approach to mineral resource management within the country. To attract investment, the government will provide various incentives such as tax waivers on mining equipment imports, streamlined electricity generation licences, full profit repatriation allowances, and improved security measures. Government spokesperson Segun Tomori noted that the review process will focus on how companies plan to add value to the Nigerian economy through local processing initiatives. Dele Alake, the Minister of Solid Minerals Development, has emphasised that this policy change aims to create jobs and support local communities, a sentiment echoed in broader continental efforts to maximise benefits from mineral resources. Nigeria’s mining sector has historically contributed less than 1% to GDP, and the government has reacted by increasing licencing and establishing initiatives aimed at regulating artisanal miners and promoting investment in local processing operations. The country currently exports a limited range of minerals, with tin ore and concentrates being its primary exports, mainly to China and Malaysia. The government’s efforts include the creation of a state-owned minerals corporation, which offers investors a 75% stake, alongside forming special units to combat illegal mining activities.
Nigeria’s mining sector has long been underdeveloped, contributing less than 1% to the national GDP despite the country’s rich mineral resources. The government has acknowledged the need to shift from a focus on exporting raw materials to promoting local processing and value addition. This approach aims to enhance employment opportunities, benefit local economies, and ensure that more generated wealth remains within the country. By establishing new guidelines prioritising local processing, Nigeria seeks to position itself as a competitive player in the African mining industry and to bolster investment opportunities.
In summary, Nigeria’s introduction of new mining guidelines requiring local processing of minerals represents a transformative step towards enhancing the domestic economy and job creation. This shift from raw material exports to promoting local value addition aims to stimulate significant investment in the sector, supported by various incentives and regulatory measures. As the government seeks to harness its mineral wealth more effectively, these changes could potentially reshape the landscape of Nigeria’s mining industry in the years ahead.
Original Source: www.theeastafrican.co.ke