LCCI berates the Declining Performance of Nigeria’s Solid Minerals Mining Sector

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The Lagos Chamber of Commerce and Industry (LCCI) expresses deep concern over the underperformance of Nigeria’s solid mineral sector in recent quarters. According to data from the National Bureau of Statistics (NBS), the Mining & Quarrying sector’s contribution to the overall GDP decreased to 4.47% in the fourth quarter of 2023, a decline from 4.51% recorded in the same period of 2022 and a significant drop from 8.32% in the preceding quarter.

The challenges facing the mining sector are multifaceted, including inadequate infrastructure, regulatory inconsistencies, limited access to financing, and security concerns in mining locations. These hurdles have collectively hindered growth, deterred investments, and impeded the sector’s potential as a catalyst for industrialization.

Despite ambitious targets outlined in the National Development Plan 2021-2025, progress toward catalyzing growth and industrialization through the minerals sector remains slow. The Government’s mining roadmap launched in 2016 aimed to create a world-class minerals and mining ecosystem, targeting a 3.0% contribution to GDP by 2025. However, with just a year remaining, little progress has been made.

Nigeria possesses vast mineral resources, yet the sector contributes less than 0.5% to GDP, with limited value addition in the economy. Solid minerals are predominantly exported with minimal processing, highlighting the need for enhanced beneficiation and value addition efforts.

To address these challenges, the LCCI calls on the government to review the mining industry strategy to attract investments, accelerate project development, and optimize mineral resource utilization in line with sustainable growth principles. Additionally, measures to address funding gaps and facilitate access to finance for value-added mineral products are imperative.

Revitalizing key entities such as the Ajaokuta Steel Company Limited (ASCL) and the Nigerian Iron Ore and Mining Company (NIOMCO) is crucial. Innovative approaches, such as adopting the NLNG management model, can facilitate this process.

Learning from experiences in the Niger Delta, inclusive strategies for Artisanal and Small-Scale Mining (ASM) should be adopted, aligned with national development plans and rural sector strategies. Supporting the mining ecosystem with essential amenities and engaging mining companies in community development initiatives are essential steps toward creating a sustainable operating environment.

If effectively implemented, these measures can revitalize Nigeria’s mining sector, positioning it as a significant driver of economic growth. Collaboration among government agencies, private sector entities, civil society organizations, and local communities is vital for success. As stakeholders committed to advancing Nigeria’s mining industry, the LCCI stands ready to collaborate with all relevant parties to unlock the sector’s potential for national development.

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