Nigeria stands at a critical juncture in the evolution of its mining sector, with untapped potential waiting to be transformed into prosperity. However, this transition requires bold reforms, collaborative efforts, and strategic thinking to overcome systemic challenges.
Speaking at the recent Nigerian Mining Week held in Abuja from November 18 to 20, 2024, I outlined the critical changes required in regulation and stakeholders’ actions to actualise the immense potential in mining in Nigeria.
Recently, the Good Governance Africa (GGA) team completed an extensive fieldwork research in Zamfara and other areas of Nigeria’s Northwest, uncovering the devastating impact of illegal mining activities and how these unlawful operations wreak havoc on local communities.
It is high time we got past the extant unworkable pretense of exclusive Federal Government ownership and control of Nigeria’s vast mineral wealth which are often located in remote areas beyond government control. To that end, a constitution amendment is required to entrust devolved responsibilities to lower tiers of government, particularly state authorities.
This should be supported with legal safeguards to ringfence the reinvestment of revenue streams into minerals geodata, security, technical capacity-building, value-chain development and community transformation.
‘Struggling Giant’
Nigeria’s predicament in the mining sector mirrors that of an abuse victim. While the country projects the image of a potential great power—aspiring to emulate mining leaders like Australia and Canada—its governance, regulatory framework, and situational awareness remain comparable to struggling resource-dependent states like the Central African Republic or the Democratic Republic of Congo.
Unscrupulous actors, including illegal miners, corrupt officials, terrorists, and foreign opportunists, exploit Nigeria’s mineral wealth with impunity. Security forces and local elites are far from being innocent bystanders, and are often complicit. Meanwhile, legitimate international investors are deterred by the lack of credibility and operational sophistication in the sector.
Despite these challenges, Nigeria has the tools to reverse this narrative. Global trends, including the energy transition and geoeconomic shifts, present unparalleled opportunities for strategic mineral partnerships and value chain integration. But first, we must confront the sector’s structural flaws.
Key Challenges
The first major weakness fuelling clandestine mining operations such as the banditry and chaos in many mining locales is the absence of orderly, fit-for-purpose governance of the sector by accountable authorities, both at the federal level and the grassroots.
Hence, the subsisting constitutional barrier and policy blockages need urgent redress. The exclusive control of mineral resources by the Federal Government creates inefficiencies and limits the involvement of states that could serve as frontline regulators. This centralised approach stifles innovation and local accountability, leaving resource-rich states underfunded and underperforming.
Also, there exist major institutional gaps that have left Nigeria’s mining suffering from inadequate geodata, outdated operational frameworks, and insufficient technical capacity. The outsourcing of geological data to foreign entities has not only emboldened illegal mining operations but also undermined Nigeria’s sovereignty over its mineral wealth.
Third, what passes as artisanal mining in Nigeria is devastating chaos, owing to the unclear definition of artisanal and small-scale mining (ASM) operations.
The rules are inadequate and also poorly enforced, leading to large-scale operations masquerading as ASM. Powerful actors, including local elites and foreign partners, exploit these loopholes, leaving communities to deal with environmental degradation, insecurity, and economic displacement.
Finally, Nigeria’s overarching energy and infrastructure deficits badly hobble the sector at a time when Africa’s prospects for mineral value addition and economic linkages have never been brighter, especially the intensifying global competition for critical minerals and green energy sources that will fuel the industries of the future.
Mineral value addition requires affordable and reliable energy. Yet, inter-ministerial coordination between mining, power, environment, and defense ministries remains weak, leaving the sector fragmented and under-resourced.
Proposed Solutions
1. Constitutional Reform: To align Nigeria’s mining governance with global best practices, the constitution must be amended to allow states a greater role in resource management. A revenue-sharing model could allocate 50% to the federal government, 33% to producing states, 10% to non-producing states, and 7% to local communities. These revenues should be ring-fenced for strategic investments in geological surveys, technical capacity building, and community development projects.
2. Strengthening Data Sovereignty: Nigeria must assert control over its geological data, ensuring that all partnerships prioritize the country’s sovereignty. Joint survey efforts should be conditional on hosting, ownership, and access rights remaining with Nigeria.
3. Defining and Regulating ASM: Clear distinctions must be drawn between artisanal and large-scale mining operations, with stringent enforcement of regulations. Artisanal mining, while inevitable, must be formalized to protect livelihoods while curbing exploitation and environmental damage.
4. Integrated Strategy: The solid minerals ministry must work closely with the power ministry and other key stakeholders to develop affordable and sustainable energy solutions for mining operations. A designated Minister of Solid Minerals and Structural Economic Transformation could ensure cross-sectoral coordination for industrialization. This coordinating minister will be responsible for leading the alignment of mineral and industrialisation strategies with the supportive clusters in infrastructure, power and manufacturing, etc.
5. Seizing Global Opportunities
Global demand for critical minerals is soaring due to the energy transition and the geostrategic competition between major powers. Nigeria must position itself as a reliable partner for both the West and the East, leveraging its resources for strategic partnerships and value chain integration. Initiatives like the Africa Mining Vision for which this author has been a member of the technical implementation advisory group since 2011 offer opportunities for deep peer learning. So do the Intergovernmental Forum on Mining (IGF), and other multi stakeholder frameworks similar to the Kimberley Process. Being there and engaging actively presents opportunities for Nigeria to showcase its commitment to mining best practices and attract investment.
To coherently frame all of this, Nigeria needs to take up lead roles in the activism to advance dialogue on strategic minerals and green energy within well coordinated value chain partnerships with superpowers including China and also with middle powers pushing into Africa such as Turkey and the UAE, etc.
Conclusion
The time to act is now. Nigeria’s vast mineral resources can no longer remain a curse of exploitation and missed opportunities. With constitutional reforms, strengthened institutions, and a commitment to global standards, the mining sector can become a cornerstone of Nigeria’s economic transformation.
By seizing the opportunities presented by global transitions and tackling the sector’s deep-rooted challenges, Nigeria can finally realize its potential as a serious, well-governed mineral producer. The journey will require courage, collaboration, and unwavering commitment—but the rewards promise to redefine Nigeria’s future.
Dr Ola Bello is the Executive Director for Good Governance Africa (GGA). He has extensive experience in mining governance and economic transformation. He has been a member of the Technical Working Group for the implementation of the African Mining Vision since 2011, supporting pan-Africa organizations, including the African Union, the AfDB, UNDP and UNECA.
