Nigeria is a nation endowed with abundant natural resources, ranging from industrial metals to precious stones; however, it has faced challenges in fully harnessing the economic potential of its mining sector. The lack of investment and underdeveloped infrastructure have impeded the industry’s growth, resulting in mining contributing less than 1% to Nigeria’s GDP.
The Minister of Solid Minerals Development, Dele Alake, has highlighted Nigeria’s low ranking in terms of exploration budget in Africa, with the country’s investment of $2.5m significantly trailing behind nations such as Côte d’Ivoire and DR Congo. Factors such as a scarcity of geological data, inadequate regulations, and community instability have dissuaded potential investors, thus limiting the industry’s growth prospects.
Recognising the need for economic diversification and the volatility of oil prices, various stakeholders, including the Progressive Miners Empowerment Association and Nigeria’s Senate president, Godswill Akpabio, have emphasised the pivotal role that mining could play in creating employment opportunities and driving foreign exchange earnings.
In response, President Bola Tinubu’s government has unveiled plans to revitalise the mining sector through initiatives such as tax breaks, allocation of funds for exploration, and the establishment of a state-owned solid minerals corporation. The government has positioned mining as a catalyst for foreign exchange earnings and social development, with efforts to create a private sector-driven corporation aimed at fostering long-term efficiency and sustainability.
Furthermore, potential collaborations with multinational companies such as Glencore and bilateral partnerships with countries like the United States have further propelled the momentum towards reinvigorating Nigeria’s mining industry.
A significant impediment to the industry’s potential has been the lack of accessible data on mineral resources, prompting proposals for good governance and transparency to attract domestic and international investors. To address this, the government has initiated the Nigeria Mineral Resources Decision Support System, providing investors with comprehensive information on infrastructure and mineral resources.
In addition to addressing data and investment clusters, proactive measures related to the involvement of local communities have been advocated to ensure sustainable and ethical mining practices. The creation of a National Solid Minerals Areas Development Commission and revised guidelines for Community Development Agreements reflect the government’s commitment to promoting socio-economic development in mining areas.
The issue of illegal mining, which has resulted in environmental degradation and security threats, is also being addressed through the recruitment of mining marshals and coercive measures to crackdown on illicit operations. The involvement of artisanal miners through the formation of cooperatives underscores the government’s concerted efforts to engage with local stakeholders in establishing a legitimate and secure mining industry.
The efforts to rejuvenate Nigeria’s mining sector are crucial in driving economic transformation, creating employment opportunities, and diversifying the country’s revenue sources. Although challenges persist, the government’s commitment and potential collaborative partnerships with private and international entities offer a promising outlook for the future of Nigeria’s mining industry.