Nigeria woos South African investors into $700bn mining sector

…Targets $500m in initial investments

Nigeria is targeting as much as $500 million in initial investment from foreign investors into its nascent solid minerals sector as it began a four-day investment roadshow in South Africa on November 6 at the Sandton Convention Centre.

The roadshow which will run until November 9 is being organised by the Nigeria High Commission in collaboration with South Africa-based investment bank, Rosebank Capital.

This year’s theme “Unlocking the potentials of solid minerals for sustainable development in Nigeria and South Africa,” aims to attract foreign direct investments in Nigeria’s solid minerals sector by leveraging South Africa’s advanced expertise in mining and resource development.

Nigeria boasts a wealth of mineral resources, from gold to tantalite, limestone and lithium.

With an estimated $700 billion worth of mining potential, the nation’s geological composition presents a treasure trove waiting to be tapped.

However, despite this potential, mining exploration in Nigeria remains underfunded, with several projects stuck at exploration stage due to challenges in accessing financing for design, construction and production.

The high capital risk and expertise gap continue to pose significant barriers for private sector participation and investments.

“We are targeting at least $500 million in initial investments and that is coming on really well,” said Niyi Oloruntoba, CEO of Rosebank Capital. “We are already discussing a single project worth $200 million,” Oloruntoba said.

Read also: Solid minerals contributed N1trn to Nigeria’s GDP in 17 years – NEITI

The event kicked off with a presentation by Yemi Kale, the chief economist of the African Export Import (Afrexim) bank.

Kale, who headed Nigeria’s data agency, the National Bureau of Statistics (NBS) for a decade, reeled out compelling statistics on the attractiveness of Nigeria as an investment destination.

“The solid minerals sector presents a great opportunity for Nigeria to diversify its economy,” Kale said.

“Nigeria can add $25 billion over next decade to its GDP by harnessing its solid minerals sector while the sector could generate 3 million jobs,” Kale added.

Kale however noted that efforts to broaden the economic base in Nigeria has faced hurdles like the lack of cohesive national planning and little investment in the non-oil sector.

Nigeria relies heavily on exports of crude oil which accounts for some 90 percent of export revenue and more than half of government revenue.

The renewed push to develop the solid minerals sector comes on the heels of an urgent need to diversify the government’s revenue base in the face of dwindling petrodollars.

Nigeria has made several attempts to diversify its revenue base but a lack of political will has often derailed the government’s plans.

This time is different, however, according to Mary Ogbe, the permanent secretary of the solid minerals sector.

“Our vision is to attract global investors into the sector with a raft of policy initiatives from tax waivers for mining equipment to a guarantee of 100 percent profit repatriation to the home country of the investors,” Ogbe said.

“We are also developing critical infrastructure to support the investors and are bundling artisan miners into cooperatives and granting them small-scale mining licences in order to formalise the sector,” Ogbe, who was representing Dele Alake, the minister of the solid minerals sector, said.

Nere Emiko, founder and CEO of Kian smith, a Nigeria-based mining company, told the room of investors about the bold strides the company was taking in Nigeria.

Her presentation not only highlighted the opportunities in the sector but served to allay some of the fears of investors about investing in Nigeria.

“If we have been there this long, it’s not all gloom and doom,” Emiko said, after going through the opportunities in investing in each of the 44 different minerals in Nigeria.