Attracting Foreign Investment in Nigeria’s Mining Sector

The Federal Government of Nigeria is actively seeking to attract foreign investors who are interested in the Nigerian mining sector, offering a business-friendly environment and low production costs that can result in increased profitability. The Minister of Solid Minerals Development, Dele Alake, made this appeal during the “Mines and Money Conference,” an international event held in the United Kingdom.

According to a statement from Kehinde Bamigbetan, the Special Adviser to the minister, Alake stressed the importance of increased investment in Nigeria, highlighting the country’s unique advantages, including lower production costs due to surface mining and a wealth of untapped minerals worth billions of dollars. He also referenced a report by audit firm KPMG, which revealed that the mining sector’s contribution to Nigeria’s Gross Domestic Product saw a significant increase from 0.3 per cent to 0.85 per cent in 2022, demonstrating a year-on-year growth of 0.63 per cent.

Nigeria boasts a wide variety of mineral types, with over 44 distinct types found in exploitable quantities across more than 500 locations. In alignment with global mineral trends, the country has recently recognized lithium as a strategically important mineral of global consequence. Alake noted that the administration of President Bola Tinubu has implemented reforms aimed at streamlining procedures and reducing barriers to foreign investment in the mining sector.

In order to provide more data on solid minerals across the country, Nigeria has conducted an Airborne Geophysical Survey and signed a Memorandum of Understanding with a German firm, Geoscan. The minister also highlighted the availability of finance through a new funding facility established by the Africa Finance Corporation and the Solid Minerals Development Fund as an additional incentive for potential investors.

Emphasizing the government’s commitment to ensuring that mining operations benefit local communities and promote value addition instead of wholesale export of raw minerals, Alake stated that Nigeria is focusing on solid minerals beneficiation and value addition as a key strategy for sustainable growth of the mining industry. By adding value to raw materials, the country can create higher value products, generate employment opportunities, particularly for the youth, and enhance the sector’s overall contribution to the nation’s GDP.

Alake urged investors to support the social and economic development of the communities in which they operate, making mining mutually beneficial. He referred to the recently inaugurated revised guidelines for Community Development Agreements, aimed at providing social amenities, educational support, and health and safety environmental facilities.

In conclusion, the minister expressed the government’s commitment to creating an attractive investment climate for foreign investors in the Nigerian mining sector. By focusing on providing a conducive environment and incentives for investment, Nigeria aims to unlock the full potential of its abundant mineral resources and promote sustainable economic development.

With Nigeria’s rich mineral deposits and the government’s reforms geared towards attracting foreign investment, the mining sector presents an attractive opportunity for global investors to tap into the country’s wealth of resources. As Nigeria continues to implement measures aimed at promoting sustainable and mutually beneficial partnerships, the mining sector is poised for continued growth and development.