Nigeria-France MOU: Why Nigerians Should Take the Lead in Mining Its Critical Minerals

Nigeria sits on a treasure trove of critical minerals—copper, lithium, nickel, cobalt, and rare earth elements—that are essential for clean energy technologies and global industrial advancement. These resources hold immense potential to transform the country’s economy, create jobs, and strengthen its global standing. However, to fully realize these benefits, Nigeria must carefully consider how these minerals are extracted and who benefits from their exploitation. Let’s break it down:

The Case for Mining and Exploiting Nigeria’s Minerals

Boosting Economic Growth: Mining these critical minerals can inject billions of dollars into Nigeria’s economy. The global demand for these resources is skyrocketing, especially with the shift toward renewable energy and electric vehicles. If Nigeria properly exploits its mineral reserves, it can reduce its dependence on oil revenues and diversify its economy, creating a more stable and sustainable financial future. Creating Jobs for Nigerians: Developing the mining sector means employing thousands of Nigerians in roles ranging from mining engineers to transport workers, laboratory analysts, and machine operators. These jobs provide income and skills for citizens, reducing unemployment and poverty levels. Accelerating Local Industrialization: By investing in value addition—such as refining and processing minerals locally—Nigeria can create industries that use these materials to manufacture batteries, electronics, and renewable energy equipment. This keeps more wealth within the country and positions Nigeria as a hub for clean energy production in Africa.  

The Downsides of Using Foreign Companies for Extraction

Pressure on the Naira: When foreign companies extract minerals, they repatriate their earnings back to their home countries in foreign currencies. This creates a massive outflow of foreign exchange from Nigeria, putting pressure on the Naira and contributing to its depreciation. Loss of Local Jobs: Foreign companies often bring in their workforce, sidelining Nigerian talent. This not only leads to job losses but also denies locals the opportunity to gain skills and experience in mining. Exporting Wealth, Not Value: Foreign companies typically export raw minerals rather than processing them in Nigeria. This means Nigeria misses out on the added value and higher profits associated with refined products, leaving the country stuck at the bottom of the value chain.

Why Local Institutions Have the Capacity to Mine Minerals

Growing Expertise: Over the years, Nigerian universities and training institutions have produced skilled engineers, geologists, and technicians capable of running mining operations. Private sector companies and state-owned enterprises are increasingly investing in local talent, making it feasible to rely on Nigerians for mining. Cost Efficiency: Local mining companies are more likely to use local materials and labour, which reduces overall operational costs and ensures that profits stay within Nigeria. Encouraging Local Content: Leveraging local institutions builds trust with host communities and fosters inclusive growth. Communities are more likely to support mining projects if they see direct benefits, such as jobs and infrastructure, staying within their areas.

The Need to Cut Down Bureaucracy in Mining Licenses

Time Is Money: The lengthy and complicated process of obtaining a mining license discourages investors and delays potential revenue generation. Streamlining this process will attract more businesses—both local and foreign—to invest in Nigeria’s mining sector. Fighting Illegal Mining: When licenses are hard to get, illegal miners step in to exploit resources without paying taxes or following regulations. Simplifying the licensing process ensures more operations are formalized, increasing government revenue and protecting the environment. Encouraging Local Entrepreneurs: Many Nigerian entrepreneurs are willing and able to invest in mining but are deterred by the high costs and red tape involved in getting licenses. By reducing bureaucracy, the government can empower more Nigerians to participate in the sector, fostering economic inclusion.

Why Nigeria Should Lead Its Mining Revolution

To secure its economic future, Nigeria must manage its mineral resources. While partnerships with countries like France are welcome, the focus should remain on empowering local companies and institutions. Nigeria can ensure that its mineral wealth benefits its people by prioritizing local content, reducing foreign exchange outflows, and cutting down on bureaucratic hurdles. Imagine a Nigeria where its citizens mine its resources, refine them locally, and use them to manufacture products that compete on the global stage. That future is within reach—if the country takes bold and strategic steps now.

• READ ALSO: Diaspora Remittances: See How Much Nigerians Abroad Send Back Home