Nigeria’s Gold Mining Industry: The Cost of Illegal Smuggling
Nigeria is recognised for its abundant mineral reserves, including gold, which is designated as a strategic mineral by the Ministry of Mines and Steel Development. However, despite the country’s potential, the development of the mining industry has been sluggish, contributing only 0.3% to national employment and 0.02% to exports. These figures lag significantly behind the contributions of other African countries such as Ghana, Cote d’Ivoire, South Africa, and the Democratic Republic of Congo (DRC).
Illegal mining and smuggling are primary factors behind the underperformance of Nigeria’s mining industry, particularly in the gold sector. According to Femi Falana, a Senior Advocate of Nigeria (SAN), and former minister Uche Ogah, Nigeria loses around $9 billion to illegal gold extraction annually, often transported via private jets. These assertions were supported by Mohammed Auwulu, Managing Director/CEO of Manorda Nigeria Limited, who claimed that Nigeria loses N100 million weekly and over N500 billion annually from gold smuggling.
However, these figures have prompted questions regarding their accuracy, especially when compared to Nigeria’s actual gold exports, which totalled $157 million last year. Additionally, the comparison with other top gold-exporting countries such as Switzerland and Ghana, with the latter showing a remarkable increase in gold production, has sparked further debate about the validity of the claims.
While there is no verifiable data to substantiate the $9 billion annual loss, it is evident that Nigeria is losing significant revenue to the illegal activities of gold smugglers. The divergence between reported reserves and actual production highlights a worrisome gap in the management and oversight of the gold mining industry.
If Nigeria can address the issue of illegal smuggling, it has the potential to significantly increase its revenue from gold exports. With a higher gold reserve than its West African counterpart, Ghana, Nigeria has the opportunity to develop its mining industry through legitimate channels, contributing to both economic growth and employment opportunities.
In conclusion, the issue of gold smuggling in Nigeria is a significant challenge that requires urgent attention. While the precise $9 billion annual losses may be challenging to substantiate, the impact of illegal activities on the country’s revenue and potential for growth in the mining sector is undeniable. With improved regulation and enforcement, Nigeria can harness the full potential of its mineral wealth and strengthen its position in the global gold market.
