Reimagining Nigeria’s Mineral Wealth for Economic Development – Business Insights
Nigeria is indisputably abundant in a diverse array of mineral resources, with 44 distinct types discovered in over 500 locations throughout the nation. These resources, encompassing coal, iron ore, bitumen, barite, gold, limestone, and lead-zinc, hold the potential to profoundly influence the country’s economy and alleviate the escalating levels of poverty. Nevertheless, despite the profusion of these minerals, Nigeria has steadfastly relied on oil, with over 133 million individuals classified as multi-dimensionally impoverished.
A report from the Nigeria Extractive Industries Transparency Initiative (NEITI) emphasized that while revenue from the solid minerals sector to the federation account has consistently increased over the years, its actual contribution to the nation’s overall economic output remains relatively low considering its vast potential. Data from the National Bureau of Statistics (NBS) reveals that the mining and quarrying sector’s contribution to the Gross Domestic Product (GDP) has fluctuated in recent years, indicating challenges such as inadequate infrastructure, illegal artisanal mining, and community-related issues.
Acknowledging the transformative potential of the solid minerals sector, the Ministry of Solid Minerals Development is charged with propelling its growth and making a substantial contribution to the nation’s industrialization efforts. Political will and commitment are imperative to maximize the sector’s gains for national development and economic prosperity. Minister of Solid Minerals Development, Dele Alake, has pledged to lead efforts to elevate the sector’s contribution to the nation’s GDP to 50% through increased foreign direct investment.
Amidst the global shift towards cleaner energy sources, there is a growing urgency to reposition Nigeria’s solid minerals sector to align with this transition and reduce the country’s over-reliance on traditional fossil fuels. Minister Alake emphasized the significance of Nigeria’s mineral deposits in sustaining the global energy transition for decades to come. He further highlighted the importance of concerted efforts and strategic partnerships, both locally and internationally, to tap into the full potential of the nation’s mineral resources and maximize their value in the international market.
In an effort to promote local value addition and ensure that Nigeria fully benefits from its mineral resources, the federal government has imposed a ban on the export of raw solid minerals and is in the process of formulating policies that encourage value addition before exportation. The intention is to grant mining licenses exclusively to companies that comply with the value addition requirements, thereby securing Nigeria’s rightful earnings from its mineral resources.
Nigeria, alongside other African countries, has been actively advocating for local value addition and maximum beneficiation from mineral resources. At international conferences such as the ‘Future Minerals Forum’ in Riyadh and the ‘Investing in Mining Indaba’ in Cape Town, African nations have collaborated to develop a common vision aimed at ensuring that the continent maximizes the benefits of its mineral resources. Nigeria’s pivotal role in this initiative was underscored by Minister Alake’s election as the chairman of the Africa Minerals Strategy Group, tasked with advancing the mining sector across the region.
As Nigeria works towards harnessing the value of its mineral resources, there is a growing focus on the exploration and extraction of critical minerals such as Lithium, which are essential for the global energy transition. Formalizing the sector and incorporating illegal miners into cooperatives is crucial to ensuring security at mining sites and effectively regulating the exploration and extraction of these critical minerals.
Efforts to reposition Nigeria’s solid minerals sector include the establishment of the Nigerian Mining Centre of Excellence (CoE), which aims to streamline the process of doing business in the sector and facilitate international partnerships and collaborations in mining investments. These initiatives, coupled with a structured approach that prioritizes sustainable policies and local economic development in mining host communities, further illustrate Nigeria’s commitment to realizing the full potential of its mineral wealth for economic growth and development.
