The Nigeria-France MOU – Catalyst to economic diversification

By Chris Okpoko

It was reported recently in the newspapers that on the sidelines of President Bola Tinubu’s recent official visit to France, both countries signed a Memorandum of Understanding (MOU) to collaborate on research, training, and Franco-Nigerian student exchanges to transfer knowledge and skills and promote both countries critical minerals value chain.

Contrary to misleading reports suggesting the MOU includes the establishment of a French military base in Nigeria, this deal is a boost to President Tinubu’s administration’s efforts to reposition Nigeria’s solid minerals sector for international competitiveness and also renews hope for Nigeria’s’ economic diversification.  

Nigeria is often referred to as the “Giant of Africa,” because of its population and vast natural resources, particularly its crude oil reserves. However, beyond hydrocarbons, Nigeria is endowed with an impressive array of solid mineral resources that remain underexplored and underutilized. From gemstones to industrial minerals, Nigeria’s solid minerals potential offers significant opportunities for economic diversification, job creation, and sustainable development. 

Nigeria is blessed with over forty (40) types of minerals including marble, coal, iron ore, gold, silica, lead, zinc, tin ore, manganese, granite, laterite, limestone, etc. (National Bureau of Statistics). The country is one of the world’s largest producers of tin, particularly in the Jos Plateau region. Additionally, Nigeria possesses substantial reserves of coal, primarily located in the north and east of the country, which could play a critical role in energy production and industrialization.

One of the most promising aspects of Nigeria’s solid minerals sector is gold mining. Recent years have seen a surge in interest in gold exploration and production. The Nigerian government has taken steps to encourage investment in this area, recognizing that gold mining could serve as both a significant revenue generator and a means of reducing the country’s dependence on oil. Small-scale and artisanal miners currently dominate the gold mining landscape, but there is tremendous potential for larger companies to step in and develop more environmentally sustainable and technologically advanced operations. Also, critical minerals such as copper, lithium, nickel, cobalt, and rare earth elements are essential to clean energy technologies.  

Another critical area of opportunity is the extraction and processing of industrial minerals. Nigeria’s limestone reserves are extensive and could support a thriving cement industry. Currently, Nigeria is one of the top cement producers in Africa, driven by the growing demand from the construction sector. By investing in local mineral processing facilities, Nigeria can reduce its reliance on imported materials, create jobs, and stimulate economic growth. In addition to limestone, Nigeria’s abundant clay, barite, and gypsum resources offer further prospects for industrial applications.

According to the recommendations of the Mining Implementation and Strategy team, Nigeria’s priority minerals will be those for which data exists around commercial viability, and based on these criteria, seven strategic mineral resources have been identified as priorities. These are Iron ore, Coal, Bitumen, Limestone, Lead/Zinc, Gold and Barite. These resources are priorities for Nigeria’s domestic industrialization, infrastructure requirements, and alternate foreign exchange-earners.

Source: World Bank and OPEC

However, while the potential is immense, the solid minerals sector in Nigeria faces several challenges that hinder its growth and development. A significant barrier is the inadequate infrastructure across the country. Poor road networks, inadequate power supply, and insufficient transportation logistics pose critical challenges for mining companies looking to operate efficiently. Consequently, the high costs associated with these logistical issues can deter foreign investment and inhibit the ability of local companies to compete.

Furthermore, regulatory and governance issues plague the solid minerals sector. Although the government has tried to improve the legal framework governing mining activities, corruption, bureaucratic inefficiencies, and unclear property rights continue to hinder progress. Investors often cite these factors as reasons for hesitance when considering investment opportunities in the sector. Streamlining processes, increasing transparency, and establishing clear mining policies will be key to attracting investment and fostering growth.

Environmental concerns also loom over the solid minerals sector. Mining activities can lead to soil degradation, water pollution, and deforestation if not managed responsibly. In Nigeria, where many communities rely on agriculture and fishing for their livelihoods, the potential negative consequences of unregulated mining practices cannot be overlooked. There is an urgent need for sustainable mining practices that prioritize environmental stewardship while supporting local communities.

The artisanal and small-scale mining sector presents another layer of complexity within Nigeria’s solid minerals potential. Although it provides income opportunities for many rural communities, artisanal mining is often characterized by illegal operations and dangerous working conditions. To harness the benefits of this sector, small-scale mining activities should be formalised. Providing training, access to finance, and resources to comply with regulations will empower local miners and promote safer, more sustainable practices.

Despite the challenges, several initiatives are underway to capitalize on Nigeria’s solid minerals potential. The Nigerian government, in collaboration with multinational corporations and international development partners, is working toward improving the sector’s framework through initiatives like the Nigerian Mining and Minerals Act. This legislation aims to facilitate investment, promote transparency, and enhance local communities’ participation in mining activities.

Additionally, public-private partnerships (PPPs) have emerged as a strategy to foster investment in the sector. By allowing private companies to collaborate with government agencies, Nigeria can leverage private sector expertise and capital while ensuring that community needs and environmental standards are met. Such partnerships can provide the necessary infrastructure, technology, and management skills to propel the solid minerals sector forward.

Education and skills development are crucial components in realizing the full potential of Nigeria’s solid minerals sector. Establishing training programs and educational institutions focused on mining, geology, and environmental management can equip the workforce with the necessary skills to operate sustainably and efficiently. Moreover, raising awareness among local communities regarding the value of their resources and the importance of responsible mining practices will foster local engagement and ownership of mining initiatives.

Another vital aspect is leveraging technology to modernize mining practices. Incorporating innovative technologies such as remote sensing, geographic information systems (GIS), and automated processing systems can lead to more efficient and environmentally friendly operations. Not only can technology reduce mining costs, but it can also minimize environmental impacts, making the industry more sustainable and compliant with global standards.

Furthermore, the MOU if implemented will:

• Promote sustainable mining activities by executing projects and programmes that reduce the environmental impact of mining on carbon emissions, water consumption, and climate change;
• Help to establish joint extractive and processing projects through co-financing by public and private entities to diversify and secure the supply of critical minerals and decarbonize energy projects vital to the value chain;
• Open new opportunities for the remediation of over 2,000 abandoned pits in the country through its plan to intervene in environmental rehabilitation and post-mining projects:
• Will improve the capacity of administrators of institutions in the critical metals sector through regular bilateral and multilateral training, seminars, and events;
• Aid the solid minerals ministry to leverage the partnership to open up the mining sector to French investors; and
• Adopt international best practices to execute the conceptualised projects and to improve the conditions of the local populace affected by mining whilst placing a premium on transparency.

In conclusion, Nigeria’s solid mineral potential is a vast and largely untapped resource that holds the key to the country’s economic diversification and long-term growth. While challenges persist— from inadequate infrastructure to regulatory issues and environmental concerns—the development opportunities are numerous. By fostering public-private partnerships, investing in education and technology, and embracing sustainable practices, Nigeria can unlock the wealth of its solid mineral resources. Doing so will not only enhance the nation’s economy but also empower local communities and protect the environment for future generations. The path forward requires a concerted effort from all stakeholders to transform challenges into opportunities and harness the true potential of Nigeria’s solid minerals sector.