Re-evaluating the Revenue from Solid Minerals: The Senate’s Investigation

The Nigerian Senate has recently voiced its apprehension regarding the declining revenue generated from solid minerals and has opted to suspend any further privatization of mining assets until a comprehensive investigation is conducted by the Committee on Solid Minerals Development.

This decision to delve into the reasons behind the diminishing revenue from solid minerals was reached subsequent to the adoption of a motion put forward by Senator Osita Ngwu, underscoring the necessity to thoroughly assess the Nigerian mining industry’s role in economic diversification, foreign exchange earnings, and social inclusion.

According to Senator Ngwu, the economic potential of the mining sector remains largely untapped despite its substantial contribution to the country’s gross domestic product. Quarrying, which accounts for nearly 90% of the mining sector, has demonstrated notable growth, particularly in the production of granite, gravel, marble, and other construction materials. However, the government has not been able to fully capitalize on these activities in terms of royalties.

Furthermore, the Nigeria Extractive Industries Transparency Initiative (NEITI) Solid Mineral Industry Report for 2020 reveals that the contribution of solid minerals to the GDP has been fluctuating over the past five years, standing at a mere 0.45 percent in 2020. This is in stark contrast to other African countries such as Botswana, Congo, and South Africa, where the mining sector significantly bolsters their GDP.

Senator Ngwu also expressed reservations regarding the ongoing privatization and commercialization of publicly funded facilities related to the Nigerian mining and mineral sector by the Bureau of Public Enterprises (BPE), without any discernible positive impact on the industry.

Several other senators, including Victor Umeh, Ahmad Lawan, and Mohammed Tahir Monguno, have echoed their concerns about the mismanagement of the mining sector, underscoring the imperative of making solid minerals development a primary legislative agenda and tapping into unexplored mineral resources to enhance the country’s revenue and address infrastructural deficiencies.

In response to these concerns, the Senate has mandated the Committee on Solid Minerals Development to scrutinize the activities of policy administrators, executors, and industry players in the mining sector. The committee will also probe the extent of illegal mining activities and the involvement of domestic and foreign industry players. Moreover, all privatization and commercialization programs related to mining assets from 1999 onward will be scrutinized, and any further privatization will be postponed until the investigation is finalized.

The committee is anticipated to furnish its findings within three weeks, providing invaluable insights into the challenges and opportunities within the Nigerian mining sector.