The Nigerian Federal Government has announced a significant mining investment projected to contribute $25 billion to the country’s GDP, with an injection of $1.3 billion into the solid minerals sector. Dele Alake, the Minister of Solid Minerals Development, introduced the initiative led by the African Finance Corporation (AFC) during the BusinessDay mining conference in Abuja. This project marks Nigeria’s most substantial private sector investment in mining.

Alake highlighted that the investment, which will establish a critical minerals facility, is expected to produce $1.2 billion annually for Nigeria’s GDP and generate $8 billion in foreign exchange. He emphasised that this endorsement reflects ongoing reforms by the ministry aimed at boosting private sector-led investments in the minerals sector.

The new Nigerian Mining Company (NMC) will be 50% owned by private investors and 25% by the government, promoting joint ventures that foster investments. Alake expressed optimism about the private sector management culture enhancing the efficiency of the company, signalling a shift away from excessive government influence in mining operations.

Despite the sector’s potential, Alake pointed out Nigeria’s historical underinvestment in solid minerals. He compared Nigeria’s exploration funding of just $2 million to the much higher investments by smaller African countries, such as Côte d’Ivoire and Senegal. This disparity, rooted in Nigeria’s reliance on oil revenues, has left the country lagging in mineral exploration and development.

Commending President Bola Tinubu’s recognition of the sector’s significance, Alake noted an increase in budget allocations for solid minerals, a vital step towards unlocking Nigeria’s mineral wealth. He reiterated the urgent need to invest in constructive sectors to shift away from the consumption-driven economy reliant on oil.

The recent $1.3 billion mining investment in Nigeria promises significant economic benefits, potentially boosting GDP by $25 billion and generating $8 billion in foreign exchange. With a focus on private sector involvement and reformed management practices, the initiative aims to rectify years of underinvestment in the solid minerals sector, acknowledging Nigeria’s vast untapped potential compared to smaller neighbouring countries.

Original Source: businessday.ng

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