President Bola Tinubu has prioritized the revitalization of Nigeria’s mining sector to diversify the economy and enhance its GDP contribution. Strategies include addressing illegal mining, revoking dormant licenses, and implementing a Value Addition Policy. Despite recent improvements, stakeholders emphasize the need for consistent actions to translate reforms into tangible economic benefits.
Since President Bola Tinubu took office on May 29, 2023, he has focused on enhancing Nigeria’s economic status through diversification, with a particular emphasis on rejuvenating the solid minerals sector. Nigeria is endowed with seven critical minerals needed for the global energy transition and possesses 44 minerals in commercial quantities. Despite this wealth, the sector’s contribution to the nation’s Gross Domestic Product (GDP) remains disappointingly low. Minister of Solid Minerals Development, Dele Alake, has since sounded a state of emergency in the sector, citing illegal mining operations funded by powerful individuals, which have hindered the sector’s revenue potential, often linked to increasing insecurity across several states.
The Nigerian government has implemented a dual strategy, incorporating both coercive and persuasive elements. The establishment of the Mining Marshals, a specialized security group, is intended to protect mining sites across the country, with personnel taken from the Nigeria Security and Civil Defence Corps (NSCDC). Over 300 illegal miners have been arrested in an attempt to stabilize the sector. Concurrently, the administration aims to formalize the activities of artisanal and illegal miners, creating 250 cooperatives to facilitate their transition to legality.
Additionally, the government has emphasized the necessity of adding value to Nigeria’s mineral resources before international trading. Through the introduction of the Value Addition Policy, companies must outline comprehensive plans for mineral enhancement prior to receiving mining licenses. Stakeholders applaud the inauguration of advanced analytical facilities, such as the state-of-the-art laboratory in Niger State, which provides crucial geochemical services for mining activities. The launch of lithium processing and tin mining plants in Nasarawa State are other notable advancements recognized by industry leaders.
In alignment with the strategy to fortify the sector, new rates and charges for mining activities were introduced, which are expected to optimize revenue through enhanced infrastructure and service efficiency. To combat license racketeering, the government has revoked 924 dormant mining licenses. This strategic move is aimed at attracting serious investors and assuring a firmer revenue stream from Foreign Direct Investments (FDI).
Despite reporting growth from N1.66 trillion in 2022 to N1.76 trillion in 2023 in GDP contributions from the sector, analysts maintain that Nigeria has significant untapped potential. The lifting of the mining ban in Zamfara is seen as a crucial recovery move, reinstating revenue streams previously lost to illegal operations. Experts advocate for further enforcement of local content provisions requiring International Oil Companies (IOCs) to utilize Nigerian minerals, which would bolster economic growth.
Looking ahead, upcoming mining conferences underscore the emphasis on technological advances and public-private partnerships as vehicles for economic revitalization. While stakeholders recognize the current administration’s initiatives, they stress the importance of actionable progress to underscore the effectiveness of these reforms. The minister has assured that additional reforms are on the horizon for 2025, anticipating even greater changes to consolidate 2024’s achievements.
The mining sector in Nigeria has long been challenged by minimal contributions to the national economy despite the country’s rich mineral resources. The recent administration aims to tackle these issues through strategic reforms, focusing on enhancing security, formalizing illegal mining activities, and implementing value addition policies to maximize the economic potential of the sector. Addressing illegal mining and its links to insecurity is critical for the overarching goal of developing Nigeria’s solid minerals sector and fostering economic growth.
In summary, President Tinubu’s administration is undertaking a comprehensive approach to reform Nigeria’s mining sector, characterized by enhanced security measures, regulatory reforms, and emphasis on value addition to mineral resources. While there have been notable improvements and plans in place to address existing challenges, consistent enforcement and actionable outcomes are necessary to sustain the momentum and materially enhance the sector’s contribution to the national economy.
Original Source: nannews.ng
