• Thursday, November 30, 2023
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Mining sector remains stunted despite huge potential

Nigeria’s mining sector has remained stunted despite the abundance of natural resources.

According to data by the Nigeria Extractive Industries Transparency Initiative (NEITI), the mining sector contribution to GDP declined from 5.6 percent in 1980 to about 0.33 percent in 2020.

This is far from the 10 percent contribution to GDP the sector aims to achieve by 2026.

Oil-dependent Nigeria has been growing slowly since the oil price collapse of 2014, as it has been susceptible to volatility in oil prices.

However, the country has vast deposits of minerals such as iron ore, copper, manganese, and graphite, which can be huge sources of revenue for the government, but they have remained underdeveloped.

Data from NEITI show that the sector contribution to GDP has remained below one percent since 2014.

This is low compared to countries like Ghana and South Africa, where minerals contributed 5.5 percent and 7.5 percent as of 2020.

Read also: Reps to probe Dangote’s coal mining activities in Kogi

Job creation is another benefit Nigeria is missing out on by leaving the sector underdeveloped.

Australia has about 320,000 direct jobs attributable to the mining sector, while over 200,000 jobs have been created in Canada through the mining sector.

Nigeria, rich in over 34 solid minerals, has over 23 million of its citizens with no jobs.

Some strategies have been put in place by the current administration to tackle the stunted growth of the sector.

The Central Bank of Nigeria, through the Presidential Artisanal Gold Mining Development Initiative, purchased its first locally sourced gold bar in July 2020. The gold bar, which weighed 12.5kg, was purchased for N268 million. The gold purchased by the CBN under this programme is meant to build Nigeria’s gold reserve.

However, illegal mining activities have become prevalent in the sector, with solid minerals being smuggled out of the country, leading to loss of potential government revenue.