AMN - Nigeria aims to lure investors – comment by Yolanda Torrisi

Nigeria hopes to lure investors in its mining industry in order to reduce its dependence on oil. The country is putting its money where its mouth is in this regard and plans to spend US$42 million over the next year to facilitate mining investment.

Oil is Nigeria's main export and it is Africa's leading producer, but falling prices and lower output has seen the country's economic fortunes falter, leading to its worst economic slump in 25 years. Tapping other resources is part of the government's economic recovery plan.

The country's Solid Minerals Development Minister Kayode Fayemi recently said because it was starting from a low base, Nigeria planned to make it more attractive for investors. He said Nigeria wanted to have a portfolio of exploration activities in place that could "whet the appetite of the average investor who wants to come in”.

This included providing sufficient baseline information to enable explorers to do the work that would entice investment.

Kayode Fayemi said the government of President Muhammadu Buhari planned to support investments in the exploration of its priority minerals including gold, bitumen, iron, barite, limestone, lead and zinc.

The government is hoping to attract as much as 60-billion naira of private investment into mining and hopes to increase the contribution of minerals to gross domestic product from less than 1% a year to more than 8% by 2020.

To further encourage investors, incentives including tax holidays of as much as five years for new companies entering the market, duty free imports on mining equipment and mining licences for 25 years have been put in place, Kayode Fayemi said.

Nigeria was one of the lowest spenders on exploration as far as mining activity was concerned, he said. “This government is determined to turn the tide on that, because we’re quite convinced of the opportunities.”

Additional support is expected through a $600-million bond to be sold by the end of the year to raise funds to provide required infrastructure and help accumulate minerals data.

Solid Minerals Ministry data shows that Nigeria has at least 44 minerals that can be extracted in commercial quantities. Mining is currently dominated by artisans, who produce gold, tin and others in small amounts.

Yolanda Torrisi is Chairperson of The African Mining Network and comments on African mining issues and the growing global interest in the continent. Contact:yolanda@yolandatorrisi.com