Revitalizing Nigeria’s Mining Sector: President Tinubu’s Strategic Approach
President Bola Tinubu has prioritized revitalizing Nigeria’s mining sector to enhance the economy by diversifying its mineral wealth. The government has declared a state of emergency to address illegal mining and its connection to security challenges. Initiatives include the establishment of the Mining Marshals for security, new regulations for mining licenses, and the introduction of the Value Addition Policy. Recent advances in mineral processing and a focus on local content aim to improve sector contributions to GDP and attract investment.
Since taking office on May 29, 2023, President Bola Tinubu has set forth an agenda aimed at enhancing Nigeria’s economic landscape through diversification, particularly focusing on revitalizing the solid minerals sector. This initiative comes in response to Nigeria’s vast mineral wealth, which includes seven critical minerals essential for the global energy transition. Despite having 44 minerals in commercial quantities, the sector’s contribution to the country’s Gross Domestic Product (GDP) remains underwhelming.
Upon appointment, Minister of Solid Minerals Development Dele Alake declared a state of emergency, citing that illegal mining activities, often backed by influential individuals, are financially fueling banditry and impeding the sector’s revenue potential. This linkage between illegal mining and insecurity is particularly evident in states such as Zamfara, where mining exploration was banned due to rampant criminal activities.
To tackle these challenges, the government implemented a dual approach combining enforcement and encouragement. A special security team, the Mining Marshals, was established to safeguard mining sites across the nation, with over 2,570 personnel currently deployed. In addition, approximately 300 illegal miners have faced legal action. On the other hand, initiatives aimed at formalizing the practices of artisanal miners have resulted in the formation of 250 cooperatives.
Alake raised concerns regarding the undervaluation of Nigeria’s mineral assets on the global stage, prompting the introduction of the Value Addition Policy. This policy mandates that companies apply for mining licenses submit well-articulated plans for value addition for their respective minerals. The inauguration of advanced laboratories in Sabon-Wuse and Nasarawa has been positively received as it facilitates detailed analysis crucial for optimal mining practices.
Furthermore, to enhance economic returns, new rates and charges for mining were instituted in July 2024, aiming to improve infrastructure and services while maximizing royalties from key minerals like lithium and gold. The government also took strides to streamline the licensing process by revoking 924 inactive mining licenses.
Although the Nigeria Extractive Industries Transparency Initiative (NEITI) reported incremental growth in GDP contribution from the sector, stakeholders believe there remains untapped potential. The recent lifting of the mining exploration ban in Zamfara is anticipated to regain lost revenue and minimize exploitation by illegal miners. There are calls, particularly from entities like the Association of Miners and Processors of Barite, for the adherence to local content mandates facilitating the use of Nigerian products by International Oil Companies (IOCs).
Upcoming mining conferences are primarily focused on innovation and public-private partnerships, highlighting advanced technologies beneficial for the mining sector. Stakeholders commend the current administration for its preliminary measures yet emphasize the necessity for consistent execution of policies to ensure these initiatives yield substantial results.
As Nigeria embarks upon a strategic plan to revitalize its mining sector, President Bola Tinubu’s administration faces both opportunities and significant challenges. The nation is rich in mineral resources, which are crucial for a transitioning global energy landscape. However, illegal mining and corruption have hindered the industry’s potential to substantially contribute to national revenue. The previous lack of formal regulations and high insecurity has deterred investment and stifled growth. In response, the government is implementing new policies designed to foster innovation, encourage legal compliance, and boost local production while attempting to attract foreign investment.
In conclusion, the mining sector in Nigeria is undergoing transformative changes under President Tinubu’s administration, aimed at expanding its contribution to the economy. While measures such as the new Value Addition Policy and enhanced security are promising, there is a critical need for ongoing reforms and effective implementation. Stakeholders’ collaboration and the enforcement of local content laws will be essential in maximizing the sector’s potential and encouraging sustainable growth. Continued focus on these initiatives may ensure that Nigeria optimizes its mineral wealth to bolster national economic stability while addressing pressing security issues.
Original Source: nannews.ng
