ABUJA, NIGERIA — Nigeria Extractive Industries Transparency Initiative has identified weak governance, illegal mining, and poor transparency as key factors driving massive revenue losses in Nigeria’s mining sector, raising concerns over the country’s ability to maximise its natural resource wealth.
The findings were contained in a newly released report presented in Abuja, Nigeria, where the agency outlined systemic challenges undermining revenue generation and accountability within the extractive industry.
According to the report, illegal mining operations remain one of the most significant threats, with unlicensed operators extracting valuable minerals without proper regulation, monitoring, or remittance of proceeds to government coffers.
NEITI noted that these activities contribute heavily to illicit financial flows, as revenues generated from such operations often bypass official channels and end up in informal or foreign markets.
The agency also pointed to weak institutional frameworks and poor enforcement of existing regulations, which have created loopholes that allow revenue leakages to persist unchecked.
Inadequate monitoring systems and lack of coordination among regulatory bodies were highlighted as additional factors that weaken oversight and accountability across the mining value chain.
The report further stressed that transparency gaps in licensing, production reporting, and revenue collection processes have made it difficult to track actual earnings from the sector.
This lack of clarity, NEITI warned, not only reduces government income but also discourages legitimate investors who require a predictable and transparent business environment.
The mining sector, which holds significant potential for economic diversification away from oil dependency, has yet to deliver expected revenue due to these persistent structural challenges.
NEITI emphasised that addressing governance issues is critical to unlocking the sector’s full potential, calling for stronger regulatory enforcement, improved data systems, and enhanced transparency mechanisms.
The agency also recommended the formalisation of artisanal and small-scale miners, noting that bringing them into the legal framework would improve monitoring and increase revenue collection.
Security concerns in mining regions were identified as another contributing factor, as illegal operators often exploit weak security presence to carry out activities without interference.
Experts say the combination of governance failures and illegal operations has created a cycle of revenue loss that continues to undermine national development efforts.
The report urged government authorities to adopt a more coordinated approach involving federal and state institutions, law enforcement agencies, and community stakeholders to combat illegal mining effectively.
It also called for the use of technology-driven solutions to track mineral production and exports, ensuring that all activities are properly documented and taxed.
As Nigeria seeks to strengthen its economy and reduce dependence on oil revenues, the mining sector remains a critical area of focus, with reforms expected to play a key role in boosting national income.
NEITI’s findings add urgency to ongoing discussions around extractive sector reforms, highlighting the need for decisive action to close revenue gaps and improve governance standards.
