Nigeria to invest $42 million in its mining industry to attract investors

Africa’s largest economy is seeking to support investments in the exploration of its priority minerals including gold, bitumen, iron, barite, limestone, lead and zinc with the hope of attracting as much as 60 billion Naira of private investment into mining.

The Nigerian government plans to spend 15 billion Naira ($42 million) in the coming year to explore mineral resources and attract investors into mining to reduce its dependence on oil.

Speaking in an interview, Nigeria’s Solid Minerals Development Minister Kayode Fayemi said “Because we are starting from a low base, we want to have a portfolio of exploration activities in places that could whet the appetite of the average investor who wants to come in, so that they will be able to ‘drill down’ when they have that baseline information”.

As a means to encourage investors, incentives including tax holidays of at most five years for new companies entering the market, duty free imports on mining equipment and mining licenses for 25 years have been put in place.

According to the executive secretary of the Solid Minerals Development Fund, Haiha Fatima Shinkafi, “A $600 million bond is to be sold by the end of the year to raise more funds to provide required infrastructure and help accumulate data on minerals” which is to serve as an additional support for the industry.

Contribution of solid minerals to gross domestic product is expected to increase to more than 8 percent by 2020 from less than 1 percent year, the government noted. It is the goal of the Nigerian government to diversify the country’s economy through the strategy of tapping into added resources, other than oil as government revenues and foreign exchange still heavily rely on the countries petroleum sector.