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Nigeria

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Nigeria accounts for Africa's largest economy and population. It is richly endowed, has a relatively young, rural, and multi-ethnic population. Nigeria has the potential to become an economic powerhouse through the effective management of its abundant resources. Oil and gas dominate the extractive sector accounting for 90% of Nigeria's export which stands at about $53 billion in 2019, and the country holds 29% of Africa's proven oil reserves. Presently, over thirty-four minerals are found in commercial quantity and spread across the entire country, including gold, iron, lead, zinc, rare metals, coal, bitumen, and gemstones. In 2019, Nigeria was the world's biggest exporter of Scrap Vessels ($2.26B) and Flexible Metal Tubing ($2.1B).

Quick Facts

Oil

Primary Mineral

Undisclosed

Estimated Reserves

Undisclosed

Tax Benefits

35

Active resource businesses

Nigeria is blessed with  abundance of natural and mineral resources, which to a greater extent remains untapped. The mineral resources reserve of Nigeria is enormous, this is evident in the fact that the States of the federation keep finding out the availability of mineral elements in their states. For example, oil resources were confirmed to be available in Bauchi and Borno states with a considerable mass of oil content. In Zamfara State, the Governor presented a rich element of gold, which the state is blessed with. These accelerated efforts by the government to identify the critical mineral resources and set a road map towards exploring, mining, and utilizing the mineral resources in such locations. New Greenfield mines are not the only option. Nigeria has previously explored mines that could be re-opened severally. The gold mining opportunity in Nigeria could be very much like that of Ghana, where abandoned mines could be redeveloped. Thus, significantly increasing the country’s mining potential. In 2019 Nigeria was the number 25 economy in the world in terms of GDP (in USD), the number 47 in total exports and, the number 50 in total imports.

Bitumen and iron ore are minerals with high potential in Nigeria. The local yearly demand for bitumen is estimated at 500,000 metric tonnes. The country is looking to stop importing the product for construction. Bitumen reserves are estimated at 62 billion barrels. Nigeria government had set up a $37 billion fund to drive investment in roads, railways, and power projects. Other minerals with good economic prospects are tin, tantalite, niobium, gypsum, gemstones, kaolin, etc.  Less than 5% of these minerals are currently being mined, processed, and marketed. These include coal, kaolin, barite, limestone, dolomite, gypsum, feldspar, gold, iron ore, lead-zinc, tin, niobium, and tantalum ores. The remaining 95% mineral ores, though in demand, are untapped. Presently, Solid minerals contribute as low as 3% to the country’s GDP as against oil export which forms more than 95% of Nigeria’s foreign exchange earnings

The Mining Industry is now a global industry, with many countries competing for exploration funds. The fierce international competition suggests that mining companies and their investment funds would only go to those countries where the enabling environment would allow the private sector to flourish without hindrance. The realization of this fact is driving the recent efforts of the Federal Government of Nigeria towards the creation of orderly and sustainable development of Nigeria’s Minerals Resources. The Nigerian government policy thrust on the mining sector is anchored on the need to develop a private sector-led mining industry with the government restricting its role to that of an administrator and regulator. In 2016, the Federal Government identified the solid mineral sector as one of the key sectors to drive the desired diversification of the Nigerian economy. This is contained in the Economic Recovery and Growth Plan (ERGP).

 

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