Posted Wed, Nov 27, 2024 2:58 PM

Transforming Nigeria’s Mining Industry: Aligning Policies with the African Union’s African Mining Vision (AMV) for Enhanced Governance and Investments

Nigeria has a rich mining history, with the mining sector contributing around 4 per cent to Nigeria's GDP from the 1950s to the late 1970s (PwC, 2022). However, the industry has declined since the 1970s due mainly to two factors. The first factor was the rise of crude oil, which diverted the government’s attention almost entirely towards oil and away from mining. The second factor was the implementation of the government’s indigenisation decree, which prompted foreign mining companies to divest from Nigeria. In line with the decree, the government established the Nigerian Mining Corporation (NMC), the Nigerian Coal Commission (NCC), and the Nigerian Iron Ore Mining Company (NIOMCO) to replace the foreign mining companies.

Between 1976 and 2003, these companies initiated several mineral exploration projects. However, these projects eventually declined due to poor management and operational inefficiencies. To revitalise the mining sector, the Federal Government, supported by the World Bank, has implemented two projects since 2002. The first-generation reforms (2003-2012) funded by the Sustainable Mineral Resource Management Project (SMMRP) established the Nigerian Minerals and Mining Act (2007) and regulations (2011), liberalising the sector and privatising some NMC, NCC, and NIOMCO brownfield mines. The second-generation reforms (2016-2024) funded by the Mineral Sector Support for Economic Diversification Project (MinDiver) to implement the Ministry’s mining industry roadmap focused on developing geoscience infrastructure and identifying mineral areas for investor targeting. The government also funded the roadmap with a N30 billion intervention fund from the Natural Resource Development Fund managed by the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC).

Given Nigeria's mineral wealth, its mining sector can be a crucial driver of inclusive economic growth, industrialisation, and diversification. However, despite efforts by the federal government to revive the sector since 2002, the sector is far from meeting its potential due to multidimensional challenges. The government can address these challenges by developing and implementing an inclusive, transparent, competitive mining policy and innovative strategies aligning with the Africa Mining Vision (AMV).

The Policy Brief on Transforming Nigeria’s Mining Industry: Aligning Policies with the African Union’s African Mining Vision (AMV) for Enhanced Governance and Investments identifies the challenges undermining the mining sector's performance and proposes reforms and strategies that the Federal Government may consider to position the sector as an essential driver of economic growth.