As Nigeria’s mining sector continues to grow, contributing over N1.56 trillion to the country’s GDP in one year, industry stakeholders are calling for increased transparency and a clearer framework in the Ministry of Solid Minerals Development’s value addition policy. The policy, aimed at boosting the local economy by processing raw minerals before export, is seen as a potential game-changer but requires further refinement, according to stakeholders.
The sector’s GDP contribution between the third quarter of 2023 and the second quarter of 2024, while significant, saw a 16% drop from N1.87 trillion recorded in the previous year. The latest GDP report from the National Bureau of Statistics (NBS) highlighted that the sector’s contributions remain modest compared to overall economic growth, primarily driven by services.
The sector, which includes coal mining, metal ores, and quarrying activities, contributed N364.49 billion in Q3 2023. This figure rose to N878.43 billion in Q4 2023, before further increasing in early 2024. Despite the growth, stakeholders are concerned that the policy framework surrounding value addition is still unclear.
Minister of Solid Minerals Development, Dr. Dele Alake, has introduced a seven-point agenda to increase foreign direct investment and enhance the sector’s contribution by 50%. This includes forming joint ventures, creating a Mines Surveillance Task Force, and establishing six Mineral Processing Centres to promote value-added products. Alake also revoked over 2,500 mining licenses for non-compliance with the new regulations.
Alake has emphasized that minerals like lithium and gold must be processed within Nigeria before export, enhancing their value and benefiting local communities. “We are no longer going to allow any company into the mineral sector without a plan for local value addition,” Alake stated. “This instantly generates employment and keeps resources in the country.”
Despite these efforts, industry experts are calling for more precise guidelines. Prof. Akinade Olatunji, President of the Nigerian Mining and Geosciences Society, commended the value addition push but argued that the policy lacks clear specifications, which may discourage mineral production. Olatunji urged the ministry to accelerate the establishment of mineral processing centres to ensure that Nigeria’s mineral resources are upgraded before export.
Recent NBS data showed that solid mineral exports surged by 102.9% in the first half of 2024, reaching N121.97 billion. However, it remains unclear whether these exports underwent value addition as stipulated by the policy. This uncertainty has prompted industry bodies, including the Miners Association of Nigeria and Women in Mining Nigeria, to request greater transparency and a more detailed framework.
With the mining sector positioned as a key contributor to diversifying Nigeria’s economy away from oil, the success of the value addition policy could have wide-reaching effects, including job creation, technological advancement, and increased revenue for the country. However, stakeholders maintain that the government must fine-tune its approach to ensure the sector reaches its full potential.
