The Nigerian solid mineral sector is still widely unexplored. Why is this so?
One of the key strategies of the current democratic government in Nigeria for economic recovery is the attraction of foreign direct investment into the country and the diversification of the revenue base of the Nigerian economy. The stated objective of the current administration is the reduction of dependence on oil revenue to about 50 per cent by 2020. Presently, virtually all the foreign direct investments coming into Nigeria are from the petroleum industry, and recently the telecommunications industry.
Even for local investors and financiers, the preferred areas of investment are in the telecommunications and petroleum industries. Local banks not renowned for lending to the real sector of the economy now readily provide financing for any business venture, which is petroleum or communications based. About 80 per cent of all government revenue is derived from the oil industry.
Meanwhile, mining should be one of Nigeria’s major success stories. Instead, it has been plagued by the same factors that undermine the country’s potential generally – deteriorating infrastructure, uncertain government policies and overdependence on oil. Given the huge amounts of capital required by mining operations and the long-term nature of projects, investors cannot be blamed for thinking twice about putting their money into the sector.
The country is trying to lure investors to its solid mineral deposits, which were sidelined in the race for oil in the 1970s. Nigeria has embarked on a new drive to turn its large deposits of sold minerals into major contributions to national income in order to diversify its foreign earnings away from oil.