On record, by a marginal growth of 0.55 percent in gross domestic product (“GDP”) in the second quarter of 2017 (driven primarily by improved performance of agriculture, manufacturing and trade sectors of the economy coupled with the gradual rise in global commodity prices and relative stability in domestic crude-oil production), Nigeria crept out of its worst recession in more than two decades; which had been precipitated largely by persistent falls in international oil prices.
Recognizing the precarious nature of an oil-dependent economy, emphasis has thus continued to be laid on diversification through development of the non-oil sector, as a sure way for the country to stay on a steady recovery path in the short term; stabilize the economy in the medium term; and build a formidable economic bulwark against external shocks (such as oil price volatility) in the long term.
This article takes a critical look at solid minerals as a viable alternative resource to Nigeria’s crude oil and presents an overview of the policies and strategies of the Government for harnessing the potentials in non-oil natural resources, as well as the dynamics of the mining landscape in Nigeria.
SECTOR REVIEW
In spite of the abundant and diverse solid mineral deposits in Nigeria (about 44 different types of non-oil mineral resources including gold, copper, iron-ore, limestone, bitumen, lignite, coal, lead/zinc, gypsum, kaolin, sapphire, granite, laterite, sand, and clay) abound across the 36 States of the country and the Federal Capital Territory, Abuja, contribution of the solid mineral sector to overall GDP remains abysmally low and lags behind the figures for major African peers such as Guinea, Botswana, Democratic Republic of Congo (DRC), Ghana, Cote D’Ivoire and South Africa.
The annual Nigeria Extractive Industries Transparency Initiative (“NEITI”) Solid Minerals Audit Report put total revenue from the sector in 2013 at N33.86 billion, and in 2014 at N55.82 billion accounting for just 0.11 percent of GDP. In 2015, a marginal growth was recorded in solid minerals mining with accrued revenue hitting N69.2 billion and amounting to 0.33 percent contribution to GDP. However, figures published by the National Bureau of Statistics (“NBS”) showed that the minerals and mining sector contributed 0.55 percent to Nigeria’s GDP in 2016 while the corresponding figures were 40 percent, 25 percent and 18 percent respectively for Botswana, DRC and South Africa for the same period. Currently, solid minerals sector contributes averagely about 0.5 percent to GDP, accounts for about 0.3 percent of national employment and 0.02 percent of exports. This contribution is a reversal of historically higher percentages of up to 5 percent in the 1960s–70s, when the economy was largely sustained by agriculture and exploration of solid minerals.
