The Federal Government of Nigeria is set to implement stricter regulations to curb the export of raw minerals and promote the export of processed products.
This strategic move aims to generate employment opportunities and enhance the overall value of Nigeria’s exports, according to Dele Alake, the Minister of Solid Minerals, who emphasized the importance of adding local value to mineral resources.
Alake stated in an interview, “You can’t take our minerals away without adding value locally. This means establishing factories to produce goods associated with the minerals being extracted.”
Nigeria, Africa’s largest crude oil producer, is diversifying its income sources as oil production declines. The country possesses significant mineral resources such as lithium, gold, bitumen, and iron ore deposits.
It aspires to follow the example of countries like Indonesia, which successfully increased the value of its commodities through regulations requiring buyers to establish refineries within their borders. Indonesia’s nickel exports, for instance, saw a tenfold increase in five years.
Despite past efforts by Nigerian governments to revitalize the mining and quarrying sector, the desired progress has been elusive.
A decade ago, the administration of then-President Goodluck Jonathan aimed to elevate the mining industry’s contribution to the gross domestic product to three percent by 2015. However, the sector only accounted for 0.2 percent of the GDP last year, as reported by PwC.
Encouraging foreign companies to refine minerals within Nigeria remains challenging due to issues such as unreliable electricity supply and limited domestic demand.
Additionally, many minerals are extracted by illegal miners. In northern Nigeria, security concerns persist, with armed gangs involved in mass abductions and killings, leading to the displacement of local communities and facilitating illegal mining activities, as noted by Alake.
