PwC decries neglect of mining sector

Forum 8 months ago

PwC decries neglect of mining sector

PricewaterhouseCoopers has called on the Federal Government to tackle the numerous difficulties facing the mining industry, noting that it is important for revenue generation.

The mining industry was once a substantial contributor to the growth of the Nigerian economy, accounting for approximately four to five per cent of the country’s GDP in the 1960s and 1970s.

PwC made this call in its ‘Nigerian Mining Progress, but still a long way to go’ 2023 report, noting that the sector had increased its solid mineral revenue generation since 2015.

It added that the Federal Government’s solid mineral receipts witnessed a growth of 78 per cent from NGN 64.46bn recorded in 2015 to NGN 114.8 billion in 2020.

According to the firm, the trend analysis of the sector’s earnings reveals a snail speed growth.

“However, with the discovery of crude oil, the industry suffered from neglect, resulting in a mere 0.17 per cent contribution to the GDP in recent years (2018 -2022),” part of the document indicated.

The report stated that 41 per cent of mining CEOs did not think their companies would be economically be viable in 10 years if they continued on their current path.

The document further read, “Several factors have been cited as responsible for the poor performance of the Nigerian mining industry, which affect the projected revenue generation and these include insecurity, smuggling, tax alignment and illegal mining, etc.

“There are also some emerging threats and potential roadblocks which Nigeria must watch out for, such as quick revenue versus long-term addition, brain drain and human capacity and increased competition for Foreign Direct Investment.

“There are therefore ample improvement opportunities if the sector must achieve the N284bn target by 2025.”

The document added that the sector employed over 86,000 of the Nigerian workforce in 2015. This number rose to over 111,000 in 2017 and subsequently to 130,000 in 2020. Its employment-generation potential is far from being realised targeting three million jobs by 2025.

According to PwC, the sector’s contribution to GDP, albeit less than one per cent between 2015 and 2021, has increased steadily from 0.13 per cent in 2015 to 0.23 per cent in 2022.