Economy
Mining investment in Nigeria, benefits and challenges
Nigeria is a land of opportunity; a large population, hidden treasures and access to the ocean (This makes it easier for her to benefit from international trades with countries in every corner of the world). Nigeria is also blessed with abundant mineral resources which are mostly available in commercial quantities. There are proven reserves of iron ore, gold, zinc, limestone, barite, tin and bitumen across the country. Among other reserves, reports show that Nigeria has deposits that are over 42billion tonnes of bitumen, 3billion tonnes of iron ore, 3billion tonnes of coal, 1billion tonnes of gypsum, 40million tonnes of talc,10million tonnes of lead and zinc, and 1.5million tonnes of rock salt. Of these reserves, it is estimated that less than 5% are currently being mined, refined and marketed.
Currently, the Nigerian mining sector contributes 0.33% to the country’s GDP. Considering the large volume of mineral deposits we have, this is way below our true potential as a nation. The Nigerian mining sector is still characterised by crude mining techniques. This partly explains why we still import materials like iron and salt. The government’s continued interest in income diversification has forced her to make investments in the mineral sector more attractive. They’ve been series of amendments to the Mining Act and geological data have also been made more available for public consumption.
With these developments, Nigeria holds a promise of a significant increase in investment from small and large multinationals and an increase in local and international market demand which will significantly boost the mining sector’s contribution to a broader economy in the coming years.
ECONOMIC BENEFITS OF MINING
The economic significance of the mining industry has been underestimated, but research has shown that the mining industry plays an important role in boosting the economy and growth of a country. Providing livelihood to local communities: With the exploration of the mining industry and the influx of investors, there will be an increase in job opportunities for the immediate community as well as the general public. Generating income for the government and contributing to its GDP growth: The exportation of mined minerals will bring about a significant increase in revenue generation for the government. This will boost the GDP of the country and increase the affordability of minerals for local consumption. Promoting more efficient use of energy and creating environmental awareness. Better lives for the citizens: The government can utilise the revenue generated to provide more infrastructural facilities for the people. Increased grassroots development. Reduction in the cost of living. The increased fusion of technology into society Massive employment and a significant reduction in the crime rate. Increased infrastructural facilities
CHALLENGES
Challenges surrounding the mining industry in Nigeria include: Limited geoscience data and information: Most of the available geological data in Nigeria are not up to date. This affects the credibility of the information and it has also affected the realisation of mining projects. Infrastructure development: the infrastructural imbalance within Nigeria is a major challenge to the development of the sector, particularly inadequate electricity supply and access roads to sites of mineral deposits. Security: Many ethnic, communal and religious conflicts occur intermittently in the country and these affect mining in some communities. Project funding: Due to the long period of dormancy and the slow implementation of the Federal Government’s reform agenda in the sector, multinational corporations have been reluctant to fund major mining projects in the country. Lack of robust fiscal framework: The existing fiscal framework in the mining sector is not investor-friendly and does not consider the strange nature of the sector, particularly, its long development period.
We expect that in the next five to ten years, the Nigerian mining sector would further develop with the entrants of new companies, a catapult in revenue growth rate in the industry, a decrease in illegal mining activities and increased participation of the host communities in promoting a harmonious relationship with the mining companies. A lot of steps have been taken to reform the sector for more investment especially as a lot is expected to be earned from solid minerals. With high expectations and willingness amongst key stakeholders to collaborate in gearing this growth, there is no better time to invest in the mining paradise of Nigeria than now.
The Arab Africa Trade Bridges (AATB) Program and the Federal Republic of Nigeria formalized a partnership with the signing of the AATB Membership Agreement, officially welcoming Nigeria as the Program’s newest member country. The signing ceremony took place in Abuja on the sidelines of the 5th AATB Board of Governors Meeting, hosted by the Federal Government of Nigeria.
The Membership Agreement was signed by Eng. Adeeb Y. Al Aama, the CEO of the International Islamic Trade Finance Corporation (ITFC) and AATB Program Secretary General, and H.E. Mr. Wale Edun, Minister of Finance and Coordinating Minister of the Economy, Federal Republic of Nigeria. The Agreement will provide a strategic and operational framework to support Nigeria’s efforts in trade competitiveness, promote export diversification, strengthen priority value chains, and advance capacity-building efforts in line with national development priorities. Areas of collaboration will include trade promotion, agribusiness modernization, SME development, businessmen missions, trade facilitation, logistics efficiency, and digital trade readiness.
The Honourable Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, called for deeper trade collaboration between African and Arab nations, stressing the importance of value-added Agribusiness and industrial partnerships for regional growth. Speaking in Abuja at the Agribusiness Matchmaking Forum ahead of the AATB Board of Governors Meeting, the Minister said the shifting global economy makes it essential for African and Arab nations to rely more on regional cooperation, investment and shared markets.
He highlighted projections showing Arab-Africa trade could grow by more than US$37 billion in the next three years and urged partners to prioritize value addition rather than raw commodity exports. He noted that Nigeria’s growing industrial base and upcoming National Single Window reforms will support efficiency, investment and private-sector expansion.
“This is a moment to turn opportunity into action”, he said. “By working together, we can build stronger value chains, create jobs and support prosperity across our regions”, Edun emphasized. “As African and Arab nations embark on this journey of deeper trade collaboration, the potential for growth and development is vast. With a shared vision and commitment to value-added partnerships, we can unlock new opportunities, drive economic growth, and create a brighter future for our people.”
Speaking during the event, Eng. Adeeb Y. Al Aama, Chief Executive Officer of ITFC and Secretary General of the AATB Program, stated: “We are pleased to welcome Nigeria to be part of the AATB Program. Nigeria stands as one of Africa’s most dynamic and resilient economies in Africa, with a rapidly expanding private sector and strong potential across agribusiness, energy, manufacturing, and digital industries. Through this Membership Agreement, we look forward to collaborating closely with Nigerian institutions to strengthen value chains, expand regional market access, enhance trade finance and investment opportunities, and support the country’s development priorities.”
The signing of this Agreement underscores AATB’s continued engagement with African countries and its evolving portfolio of programs supporting trade and investment. In recent years, AATB has worked on initiatives across agribusiness, textiles, logistics, digital trade, export readiness under the AfCFTA framework, and other regional initiatives such as the Common African Agro-Parks (CAAPs) Programme.
With Nigeria’s accession, the AATB Program extends it’s presence in the region and adds a key partner working toward advancing trade-led development and fostering inclusive economic growth.
Federal Executive Council (FEC) has approved the 2026–2028 Medium-Term Expenditure Framework (MTEF), a key fiscal document that outlines Nigeria’s revenue expectations, macroeconomic assumptions, and spending priorities for the next three years. The approval followed Wednesday’s FEC meeting presided over by President Bola Tinubu at the State House, Abuja. The Minister of Budget and Economic Planning, Senator Atiku Bagudu made this known after the meeting.
The Minister said the Federal Government is projecting a total revenue inflow of N34.33 trillion in 2026, including N4.98 trillion expected from government-owned enterprises. Bagudu said that the projected revenue is N6.55 trillion lower than earlier estimates, adding that federal allocations are expected to drop by about N9.4 trillion, representing a 16% decline compared to the 2025 budget.
He said that statutory transfers are expected to amount to about N3 trillion within the same fiscal year. On macroeconomic assumptions, FEC adopted an oil production benchmark of 2.6 million barrels per day (mbpd) for 2026, although a more conservative 1.8 mbpd will be used for budgeting purposes. An oil price benchmark of $64 per barrel and an exchange rate of N1,512 per dollar were also approved.
Bagudu said the exchange rate assumption reflects projections tied to economic and political developments ahead of the 2027 general elections. He said the exchange rate assumption took into account the fiscal outlook ahead of the 2027 general elections.
The minister said that all the parameters were based on macroeconomic analysis by the Budget Office and other relevant agencies. Bagudu said FEC also reviewed comments from cabinet members before approving the Medium-Term Fiscal Expenditure Ceiling (MFTEC), which sets expenditure limits. Earlier, the Senate approved the external borrowing plan of $21.5 billion presented by President Tinubu for consideration The loans, according to the Senate, were part of the MTEF and Fiscal Strategy Paper (FSP) for the 2025 budget.
The spot rate on Nigerian Treasury bills has been increased by 146 basis points by the Central Bank of Nigeria (CBN) following tight subscription levels at the main auction on Wednesday. The spot rate on Treasury bills with one-year maturity has now surpassed Nigeria’s 16.05% inflation by 145 basis points following a recent decision to keep the policy rate at 27%.
The Apex Bank came to the primary market with N700 billion Treasury bills offer size across standard tenors, including 91-day, 182-day and 364 day maturities. Details from the auction results showed that demand settled slightly above the total offers as investors began to seek higher returns on naira assets despite disinflation.
Total subscription came in at about N775 billion versus N700 billion offers floated at the main auction. The results showed rising appetite for duration as investors parked about 90% of their bids on Nigerian Treasury bills with 364 days maturity. The CBN opened N100 billion worth of 91 days bills for subscription, but the offer received underwhelming bids totalling N44.17 billion.
The CBN allotted N42.80 billion for the short-term instrument at the spot rate of 15.30%, the same as the previous auction. Total demand for 182 days Nigerian Treasury bills settled at N33.38 billion as against N150 billion that the authority pushed out for subscription. The CBN raised N30.36 billion from 182 days bills allotted to investors at the spot rate of 15.50%, the same as the previous auction.
Investors staked N697.29 billion on N450 billion in 364-day Treasury bills that was offered for subscription. The CBN raised N636.46 billion from the longest tenor at the spot rate of 17.50%, up from 16.04% at the previous auction.
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