Article summary
- A KPMG report says the Buhari administration has introduced some measures that have sustained growth in the mining sector in the last few years.
- The policies and strategies being employed by the current administration have been effective in reviving the mining sector over the period.
- More efforts are required to set the Sector on a faster growth trajectory, to compete with the oil and gas sector
KPMG Nigeria has said that the country’s mining sector has seen sustained growth under the Muhammadu Buhari administration.
This is according to the company’s mining sector watch report. According to KPMG, Nigeria currently boasts over forty-four priced solid minerals in the mining space, with huge deposits scattered over different parts of the country.
However, the contribution of the mining sector (with such huge potential) to the gross domestic product (GDP) of the country remains surprisingly abysmal. A part of the report stated:
- “Nigeria’s GDP grew by 3.52%1 (year-on-year) in the fourth quarter of 2022. The Nigerian Mining Sector also witnessed growth in its contribution to the Nation’s GDP, having contributed 0.85% in 2022, meanwhile, it contributed 0.63% in 2021, representing a 32% year-on-year growth over 2021.
- “Interestingly, the Sector has witnessed sustained growth in the GDP over the last five years, the policies and strategies being employed by the current administration have been effective in reviving the sector over the period. However, more efforts are required to set the Sector on a faster growth trajectory, to compete with the oil and gas sector.”
According to the KPMG report, the incoming administration needs to do more in the mining sector. The report highlighted some initiatives that were introduced by the Buhari administration while suggesting some recommendations.
These recommendations include:
- The Ministry of Mines & Steel Development should embark on an enlightenment campaign to create awareness about the features and benefits of the National Geodata Centre to potential investors within and outside Nigeria. The Centre is expected to enhance the ease of online access to appropriate (reliable and up-to-date) geological reports and data about mineral reserves and/or deposits in the country.
- The Federal Government needs to engage in further consultations with all key stakeholders to ensure that the best outcome emanates from the recent controversy surrounding the concession of the Ajaokuta Steel Company and the National Iron Ore Mining Company.
- The Federal Government should ensure that mineral clinics are not a one-off exercise and should be held frequently. This will help stakeholders and the government to meet and deliberate on pertinent issues affecting the mining sector.
- As China’s Ming Xin Mineral Separation Nigeria Limited has been selected to build Nigeria’s first lithium processing plant in Kaduna State, it is important for the government to enact laws and implement policies to control the exploration, production, and exportation of lithium in the country. These should include policies aimed at mitigating the harmful effects of mining. The government should also firm up its local content laws for the benefit of indigenous players in the sector.
