Solid Mineral Value Chain Transparency: Getting Nigeria Out Of Recession

Since the discovery of crude oil in 1956 and oil boom in the 1970s, government revenue generation in solid mineral sector have been depreciating. Solid minerals only contribute less than 5% of the country’s GDP. This is even as the exploration of solid mineral was a major source of revenue generation before the discovery of oil in Bayelsa state in 1956.

Nigeria Geological Survey Agency study shows, there are more than 34 minerals that are economically viable for exploitation towards a sustainable development. When properly developed, mining can be a key driver to global economic growth and development and can also be a major economic tool towards getting Nigeria out of recession.

Solid Mineral is capable of creating long-term positive impact on the country’s economy and economic revival.  As the government pushes for economic diversification through the development of the non-oil sector, the development of the mining sector essentially has the capacity to bring Nigeria out of recession. Thus, the maximization of the benefits across the extractive value chain is what we need.

There are other minerals with potential for development and revenue generation in Nigeria. These include, Precious metals –Gold, Base metals Tin, lead zinc, Ferrous metals, Iron Ore; Industrial minerals .limestone, Baryte , Kaolin ,Energy Minerals like coal /Lignite . With huge potential and market demand, the exploration of these minerals and the revenue accruable, solid minerals will be contributing significantly to Nigeria’s Gross Domestic Profit, GDP.

Small and artisan mining needs to be properly developed, in the mean time, the regulators can initiate programs to encourage artisanal and small scale mining before the reforms and other measures are put in place for the big companies These will help the country capture the revenues lost through illegal mining.

Artisanal and small scale mining have been going on in Nigeria for over 2400 years. This includes the mining of basic clays to base metals and gold. From 1970 till date Artisanal and Small scale mining has continued to dominate the Nigeria mining sector and these accounts for over 90% of solid mineral mining in the country. There are more than 170 ASM site identified in the country and with over 400,000 people directly involved, and about 1,500,000 indirectly involved, with about 300,000 as service provides that support the mining operations.

For the maximisation of the benefits from the ASM the government and other stakeholders need to assist the ASM by doing the following; the provision of extension services to mining cooperatives and quarry associations on exploration, mining processing, entrepreneur training, environmental management, and health and safety issues. Secondly, the registration of mining cooperatives, Quarry associations and mineral buying centres/ mining support centres.

In addition the consolidation of the ASM department especially in key areas like  capacity building, access to finance and marketing , assist in gradual growth from artisanal cooperatives to small scale mining and medium scale operations.  The adoption of the above measures will assist the country in developing the mining sector. Nigeria also needs reforms to capture the different taxes in the solid mineral sector and the formalisation of the economy.

The government needs to restructure the fiscal and regulatory regime to encourage foreign investment, and the influx of mining capital, technology and skill to enlarge the mining sector with attendant economic benefit and industrialisation. The constitution should be amendment to empower the states to get involved in mining mineral resources in their area.

Paul Ogwu

Programmes Officer, PWYP-Nigeria

Abuja Secretariat