The KPMG report states that Nigeria’s mining investment framework lacks attractiveness, leading to minimal economic impact, with the sector contributing under 1% to GDP. It calls for a comprehensive review of fiscal policies and a necessary update to the NMMA to align with global practices. Seven strategic minerals have been identified for focused development to enhance economic growth.
The latest KPMG report on Nigeria’s mining sector indicates that the current investor framework is unattractive and does not address the unique challenges of the industry. Despite attempts by successive federal governments to revitalize this sector, the growth has been minimal, with mining contributing less than 1% to Nigeria’s GDP as of 2023.
In 1999, Nigeria aimed to refocus its mining strategy, leading to the 2007 Nigerian Minerals and Mining Act (NMMA). However, successes have been limited; the sector’s GDP contribution remains only 0.77%. The government previously set a target in 2016 for this contribution to rise to 10% of GDP by 2026 through a roadmap outlining industry development.
Although an N30 billion intervention fund was launched to attract multinational companies and promote exploration, tangible results have not followed. The mining value chain is categorized into exploration, processing, and marketing, but only upstream operations have seen some growth. Furthermore, fiscal incentives appear scattered across various laws, necessitating harmonization for clearer guidance to operators.
KPMG urges a complete review of the fiscal framework to align it with global standards, thus attracting investors. Moreover, updating the NMMA is essential to align provisions with the current mining ecosystem. Nigeria has over 44 minerals at 500 sites, yet seven strategic minerals—Coal, Bitumen, Limestone, Iron Ore, Barites, Gold, and Lead/Zinc—are prioritised for development due to their economic potential.
The KPMG report highlights that Nigeria’s mining sector framework is insufficiently attractive for investors, contributing less than 1% to GDP. It calls for a comprehensive review of the fiscal policies and updates to the Nigerian Minerals and Mining Act to enhance the sector’s appeal. The prioritisation of seven strategic minerals underlines the potential for growth if strategic measures are implemented.
Original Source: businessday.ng