President Bola Tinubu has initiated reforms in Nigeria’s mining sector in an effort to diversify the economy and enhance its contribution to the GDP. Key initiatives include the establishment of Mining Marshals for security, the introduction of the Value Addition Policy for enhancing mineral value, and revoking dormant mining licenses. These reforms aim to tackle illegal mining while promoting legal operations and increasing national revenue through improved regulatory frameworks and strategic investments in mining infrastructure.
Upon presiding over the nation starting May 29, 2023, President Bola Tinubu set forth an ambitious agenda to enhance Nigeria’s economic performance by diversifying its prevailing mono-cultural economy, specifically by revitalizing the solid minerals sector. Despite Nigeria’s wealth in minerals—boasting 44 types in commercial quantities and seven critical minerals necessary for the global energy transition—its contribution to the Gross Domestic Product (GDP) remains disappointingly low.
In response to the pressing issues plaguing the mining sector, Minister of Solid Minerals Development, Dele Alake, declared a state of emergency, citing illegal mining operations linked to funding banditry, which hampers revenue generation. His remarks highlighted the intertwining of insecurity and illegal mining activities in regions like Zamfara, where a 2019 mining ban was instated due to rising criminal activities. Northern states, including Plateau and Niger, continue to encounter similar security hurdles.
The government’s strategic approach encompasses both coercive and persuasive measures. The establishment of the Mining Marshals—a specialized security unit—aims to safeguard mining sites and has thus far led to the arrest and prosecution of over 300 illegal miners. In its persuasive efforts, the administration has facilitated the formation of 250 cooperatives to transition artisanal and illegal miners into legal operations, amplifying the sector’s potential.
Addressing the international undervaluation of Nigeria’s mineral resources, the Value Addition Policy was introduced, requiring mining companies to detail their value-addition plans before acquiring licenses. This initiative aims to increase the domestic worth of exported minerals, reflecting a promising direction for the sector. Recent advancements, such as the inauguration of a state-of-the-art laboratory for geochemical services in Niger State, are crucial for identifying valuable mineral deposits, thereby accelerating the value addition process.
The mining landscape is further invigorated by the commissioning of new processing facilities, including a lithium laboratory and a tin mining plant in Nasarawa State. Stakeholders emphasize that while mineral processing represents a vital component, branding and the conversion of raw minerals into finished products will significantly contribute to sector growth.
A new regulatory framework has been established, which includes increased rates for mining activities introduced in July 2024, aimed at consolidating the mining sector and enhancing national revenue through more substantial royalties from critical minerals like lithium and gold. To prevent mismanagement of resources, the government also revoked 924 dormant mining licenses in April 2024, a decisive move to deter license racketeering and attract responsible investment.
Recent reports indicate that the sector’s GDP contribution rose from N1.66 trillion in 2022 to N1.76 trillion in 2023, showcasing notable potential yet to be fully realized. Stakeholders believe further improvements could materialize if detrimental issues such as over-regulation and excessive taxation are resolved. The decision to lift a mining exploration ban in Zamfara serves as a critical step toward rectifying previous revenue losses.
With major mining conferences focusing on innovation and technology scheduled in 2024, a collective eagerness for sustainable development in the mining sector is apparent among stakeholders. Experts remain hopeful regarding the administration’s efforts but stress the necessity for consistent policy applications to yield observable improvements. Minister Alake has assured that more reforms are expected in 2025, providing an outlook of optimism for the sector’s future.
The Nigerian mining sector has historically been plagued by challenges, primarily stemming from illegal mining operations and a lack of formal regulation. Despite possessing vast mineral resources crucial for global energy needs, corruption, insecurity, and insufficient infrastructure have restrained its economic contribution. Recent changes under President Bola Tinubu’s leadership, including policies aiming to address these issues, highlight a pivotal moment for revitalizing this sector and enhancing national revenue while also exploring its full potential in a growing global market for minerals. The government’s response has included both immediate security measures and long-term strategies focusing on legal compliance and value addition, indicating a comprehensive approach to transforming the industry. Stakeholders are actively engaged in processes that seek to modernize and formalize operations, recognizing the significance of Nigeria’s minerals in a changing economic landscape that increasingly values sustainability and resource management.
In conclusion, President Bola Tinubu’s administration is undertaking significant reforms in Nigeria’s mining sector to enhance its economic impact. The dual approach of addressing illegal mining through security measures while simultaneously promoting legal operations and value addition signifies forward-looking governance. Despite progress, ongoing challenges remain that must be systematically addressed. Nevertheless, stakeholders express cautious optimism as the focus shifts towards sustainability and greater economic contributions from this vital sector.
Original Source: nannews.ng
