Despite being rich in 44 different types of commercially viable minerals, Nigeria’s solid minerals sector failed to generate up to a trillion naira in revenue over a 15-year period. Data from the Nigeria Extractive Industries Transparency Initiative (NEITI) reveals that the sector contributed N818.04 billion ($3.2 billion) to the Federal Government’s earnings between 2007 and 2021. The report underscores the need for enhanced infrastructure, exploration, mining activities, and policy reforms to significantly boost the sector’s contribution to the economy.
Key Points:
- Nigeria possesses abundant resources including gold, manganese, bitumen, lithium, and more in over 500 locations across its states and the Federal Capital Territory.
- In the first half of 2023, the sector contributed N60.11 billion, making up only 0.56 percent of total trade.
- NEITI’s industry report highlights a 51.89 percent increase in revenue from the sector in 2021, totaling N121 billion.
- Limestone and granite dominated production in 2021, accounting for 74.4 percent of total output, though the sector’s contribution to the economy remained at a modest 0.63 percent.
Analysis: The NEITI report sheds light on the untapped potential of Nigeria’s solid minerals sector. To harness this potential, significant efforts are required, encompassing infrastructure development, exploration, investment attraction, and policy enhancements. It is imperative for the government to provide robust support, incentives, and an improved regulatory framework to encourage local and foreign investment. Addressing issues such as illegal mining and championing sustainable practices will be vital. With a holistic approach, Nigeria can make substantial strides towards unlocking the sector’s full economic potential.
Exports and Destinations:
- China played a dominant role, accounting for 95 percent of total export volume and 88 percent of value.
- Other significant destinations included Malaysia (4.64 percent), Korea (1.41 percent), Thailand (1.17 percent), and the UAE (1.11 percent).
- The industry report indicates that 143,000 tonnes of minerals were exported during the period.
States’ Contribution to Production:
- Ogun, Kogi, Edo, Cross River, and the Federal Capital Territory emerged as the top solid mineral-producing states in 2021, collectively contributing 66.49 percent to total production volume.
Contribution by Geopolitical Zones:
- The North-Central, South-West, and South-South regions were primary contributors, accounting for 31.2 percent, 30.5 percent, and 23.7 percent of total production, respectively. In contrast, the South-East made the lowest contributions, accounting for 0.94 percent of production volume and 0.9 percent of royalty.
License Issuance Improvement:
- Artisanal mineral operators saw an 85 percent increase, totaling 2,336 across the country. However, corresponding data on production, royalty payments, and exports was lacking to support this surge in operators.
Minister’s Policy Directive:
- Dele Alake, the Minister of Solid Minerals, emphasized the need for a paradigm shift in the sector’s strategy to fully exploit the trillion-dollar worth of minerals beneath Nigeria’s soil. He advocated for the establishment of a corporate body akin to the petroleum sector, proposing the incorporation of the Nigerian Solid Minerals Corporation.
This report underscores the need for strategic reforms and investment in Nigeria’s solid minerals sector to unlock its vast economic potential.