Reviving Nigeria’s Mining Sector: Progress, Challenges, and Potential Opportunities

The mining sector in Nigeria has encountered significant challenges, particularly due to inadequate funding and issues of insecurity. Despite the efforts of the current administration under the leadership of President Muhammadu Buhari, the industry remains underdeveloped and heavily reliant on imports for key minerals that could be domestically produced.

The Ministry of Mines and Steel Development reports that Nigeria is blessed with 44 different types of minerals in commercial quantity across the country. However, the underutilization of these resources is a major concern. The reliance on oil for almost 90 per cent of foreign exchange earnings has hindered the development of the mining sector.

Amidst these challenges, there have also been notable successes. The current administration has approved a N30 billion intervention fund for the mining sector, secured a $150 million loan from the World Bank, and witnessed an increase in the sector’s contribution to the nation’s GDP. The Nigerian Geological Survey has also been working to attract investors by developing data on strategic minerals.

In addition to financial support, the government has been active in creating the necessary legislative and regulatory environment for the mining industry to thrive. This includes offering 100 per cent ownership of mining investments to attract both local and foreign investors, and the approval of a national policy on the local production of bitumen.

However, the sector has been marred by insecurity, particularly in areas such as Zamfara and Kaduna states, which has deterred foreign investors. The ban on mining activities in Zamfara State due to insecurity has further compounded the challenges faced by the mining industry.

Despite the challenges, there is immense potential in the mining sector, particularly with the increased global demand for critical minerals such as lithium, manganese, and nickel. The National Association of Chambers of Commerce, Industry, Mines and Agriculture has highlighted the importance of these minerals for the global green transition and encouraged the government to create incentives to attract foreign direct investment.

Furthermore, industry experts have stressed the need for the government to take advantage of the country’s strong geophysical and geo-mining profession to encourage the growth of the sector. This includes creating opportunities for the employment of highly skilled technical expatriate staff and implementing technology transfer arrangements to benefit Nigerians.

In conclusion, while poor funding and insecurity have hampered the growth of Nigeria’s mining sector, there have been notable progress and potential opportunities for development. By addressing the challenges and creating a conducive environment for investment, Nigeria can harness the full potential of its rich mineral resources and contribute to the diversification of its economy.