Nigeria’s overreliance on oil has made its economy vulnerable to external shocks tied to the hydrocarbon industry. While the 1956 discovery of oil was initially a boon, it has become a double‑edged sword. In the 1950s, oil accounted for less than two percent of Nigeria’s exports; agriculture contributed 60‑70 percent and mining about seven percent. The 1973 oil boom shifted the country from an oil‑producing nation to an oil‑dependent state. By the fourth quarter of 2022, oil made up 77.24 % of total exports, while agriculture fell to 2.68 % and solid mineral goods to a mere 0.33 %, according to the National Bureau of Statistics. Of the N6.36 trn earned from exports in that period, crude oil contributed N1.88 trn (35 % of the total), whereas mining generated only N21.03 bn.
This dependence on oil exposes Nigeria to fluctuations in global crude prices. International events that affect oil markets directly impact national revenue, as seen during the Buhari administration’s recessions in 2016 and 2020, triggered by a shale‑driven glut and the COVID‑19 pandemic. The ongoing Russia‑Ukraine war further strains the economy. Consequently, stakeholders have called for diversification, highlighting the mining sector’s untapped potential. Experts estimate that, if properly harnessed, mining could contribute about seven percent of GDP annually—up from five percent in 1980, before declining to less than one percent in 2022. Nigeria boasts over 44 solid minerals, yet the sector has been largely overlooked in discussions about reducing oil dependence.
Minister of Mines and Steel Development Olamilekan Adegbite emphasized this neglect at a recent mining conference, noting the need for funding and awareness of the sector’s possibilities. He praised the Central Bank of Nigeria’s substantial investment in agriculture but urged greater support for mining, especially as the country transitions toward electric vehicles and renewable energy, which will require minerals that Nigeria currently lacks. KPMG’s recent report observed that, despite the COVID‑19 pandemic’s disruption of global mining, countries that capitalized on the industry saw significant revenue gains. Nigeria’s mineral wealth includes gold, lead, zinc, limestone, salt, cassiterite, clay, dolomite, marble, tantalite, gypsum, lignite, manganese, uranium, barite, coal, gemstones, iron ore, bitumen, phosphate, glass‑sand, and more.
Globally, modern electronics rely heavily on mined materials. In 2021, 1.5 billion smartphones were sold worldwide, each containing components made from lithium, manganese, cobalt, graphite, and other minerals. While China dominates mineral exports, other regions, including Africa, contribute significantly. South Africa, a non‑oil producer, earns an estimated $125 bn annually from minerals, and Asia generates about $1.8 tn. At COP27, the United Nations warned that current climate actions are insufficient, stressing that Africa’s minerals will be crucial for the shift from fossil fuels to renewable energy. Realizing this potential will require strong policy management and a balance of short‑ and long‑term goals.
Nigeria loses roughly $9 bn each year to illegal mining and gold smuggling, according to the Nigeria Extractive Industry Transparency Initiative. Nevertheless, Minister of Finance Zainab Ahmed asserted that the country already has a framework for diversification. She noted that oil and gas now contribute only 6.4 % of GDP, leaving 94.6 % to other sectors, with mining poised for growth. Ahmed highlighted that mining remains small due to governmental neglect, despite active private‑sector and state‑level operations. Much of the activity is artisanal and unreported, depriving the government and miners of full value.
Ide Udeagbala, National President of the National Association of Chambers of Commerce, Industry, Mines and Agriculture, stressed that Nigeria’s mineral deposits—copper, manganese, lithium, among others—are essential for the global green transition. He warned against repeating the oil sector’s mistakes and urged the government to attract investors, establish local processing industries, and offer incentives such as tax holidays and investment moratoriums. Udeagbala also advocated for technology transfer and employment of skilled expatriate staff to build local capacity.
Gabriel Idahosa, Vice President of the Lagos Chamber of Commerce and Industry, recalled that before the oil boom, Nigeria was a major exporter of coal and cobalt. He argued that the country can revive its mining expertise now that economic constraints are shifting. Idahosa highlighted the government’s ongoing geophysical survey, which maps mining resources and makes data accessible to investors through an online portal. He called for intensified marketing of this information to both local and international investors, noting that the data exists but is not widely known.
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