Business is booming.

LCCI bewails the decreasing fortunes of Nigeria’s mining sector

The Lagos Chamber of Commerce and Industry (LCCI) has bewailed the decreasing fortunes of the country’s mining sector.

In a survey which was titled ‘Repositioning of the Nigerian Mining Sector for Growth: Challenges and Way Forward’, it was revealed that the sector contributed an average 0.13 per cent or less than one per cent to the national gross domestic product (GDP) in the last ten years.

According to the chamber, this was in contradiction to Nigeria’s rich natural resources with over 40 known minerals and the country’s renewed commitment to reviving the sector.

The survey further revealed that various policies which aimed at restoring the lost fortunes of the sector have not yielded results with the current performance status of the sector which is at the lowest as compared to other sectors.

The survey drew a comparison with other mineral-rich countries in Africa such as Ghana, Guinea, South Africa, DR Congo and Botswana, with their sectors contributing above five per cent to their respective economy.

Furthermore, it added that these minerals were in commercial quantities across various parts of the country.

The survey recalled that between the 1960s and early 1970s, Nigeria led in the export of coal, columbite and tin in the global market. With the oil boom in the mid-1970s and other socio-economic and political factors, Nigeria lost its focus on other revenue spinning sectors and focused on oil. This, according to them, formed the beginning of the fall of the mining sector.

“Mining is a big business in Africa and a cornerstone of many economies with huge mineral endowment. Despite Nigeria being a mineral-rich country with over 40 known types of minerals, contribution of mining sector to the economy has remained incredibly low at less than one percent for decades. Mining activities contributed an average 0.13 per cent in the last decade.

“This compares poorly with other mineral-rich countries in Africa such as Ghana, Guinea, South Africa, DR Congo and Botswana, where the sector contributes more than five per cent to their respective economy.”

“For instance, a national focus and strategy on mining was developed in 1999, which led to the enactment of the Nigerian Minerals and Mining Act 2007. However, various policy efforts aimed at revitalising the sector failed to yield desired outcomes, with solid minerals being one of Nigeria’s underperforming sectors in terms of contribution to GDP.

“The economic downturn staged by the covid-19 and weakening energy prices has yet again brought to the fore the need for economic diversification. As the government is currently focused on diversifying its revenue base by reducing reliance on oil, mining, given its huge potentials, is an untapped revenue source for the Federal Government to explore.

“The impact of this underdevelopment is seen in lost tax revenue to the government, lost foreign exchange earnings, limited job opportunities and lack of adequate facilities associated with a developed mining industry.

“Over the years, the sector has been confronted with myriads challenges ranging from technical to financial, which has consequently hampered its growth and development. Challenges exist around funding and attraction of new investments, security situation around mining sites, preponderance of artisanal and illegal mining operations, attendant environmental pollution, and the general infrastructural deficit,” the report survey added.

Recall that several efforts have been made by the Federal Government in reviving other non oil sectors of the economy with turn around maintenance and other policy formulations with the mining sector gaining lot of attention.

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