Mining – The New Nigerian Frontier

For many decades, crude oil has been the primary source of Nigeria’s wealth and indeed the mainstay of the Nigerian economy. The inherent dependency risk in this trend has been heightened by the steady fall in demand and oil prices since June 2014. The reduced inflow of petrodollars into the economy coupled with the lack of diversification in Nigeria’s economy, led to a significant economic decline, and the country’s first economic recession for over two decades, in 2016. This downturn in fortunes provided the opportunity for Nigeria to begin to galvanize its oft-touted plans of economic diversification, beginning with the development of the Economic Recovery Growth Plan (ERGP) by the President Buhari-led administration.

The ERGP seeks to focus on six priority sectors, prime of which is the mining sector, which has been recognized by the Federal Government of Nigeria (the FGN) as a priority sector that will drive economic growth from -1.54% in 2016 to 7%  in 2020. Within the last year in particular, the Nigerian mining sector has witnessed unprecedented growth and significant development within the areas of policy direction (the issuance of the mining Roadmap), enhanced access to financing for mining operators, targeted efforts at curbing illegal mining activities, (among others) – a combination of factors which has resulted in the mining sector already accounting for 15.39% of GDP as at July 2017.

The commitment of the current administration acting through the Hon. Minister of Mines and Steel Development has been remarkable and is indicative of the keen recognition by the FGN that the development of the sector will be critical to achieving meaningful economic diversification. The nascent state of the Nigerian mining sector belies its vast prospects, when due cognizance is had to the fact that Nigeria is a country endowed with an abundance, variety and quality of solid mineral deposits, which if properly harnessed, could phenomenally transform the economic landscape.

Continue reading