The Nigeria Extractive Industries Transparency Initiative NEITI has stated that given the commercially viable deposits of solid minerals such as gold, lithium, limestone, and gemstones, the sector should be a major revenue driver of the country, but reverse is the case, where latest NEITI 2023 industry audit report disclosed that the sector contributed paltry N401 billion in revenue and accounted for only 0.72% of GDP.

This was part of the Policy brief released yesterday from the NEITI House titled “Stemming the Scourge of Illicit Financial Flows in Nigeria’s Mining Sector.” NEITI noted that the Nigeria’s mining sector is widely regarded as a cornerstone for economic diversification.

The Policy Brief explained that the stark underperformance is driven by illicit financial flows (IFFs) that continue to erode the sector’s potential by facilitating: Revenue leakages and tax evasion, Illegal mining and smuggling activities, corruption and weak institutional oversight, and money laundering linked to organized criminal networks.

The study’s findings establish that IFF enablers in Nigeria’s mining sector are systemic rather than incidental, embedded across institutional arrangements, market structures, data systems, and security environments. The brief emphasised: “Severe fragmentation of regulatory oversight across institutions including the Ministry of Solid Minerals Development (MSMD), the Mining Cadastre Office (MCO), NEITI, Nigeria Customs Service, Nigeria Financial Intelligence Unit (NFIU), and relevant state agencies. Each institution collects sector-relevant data in siloes, with limited interoperability and no integrated sector-wide digital monitoring system”.

Furthermore, the Publication also identified weak data governance and insufficient enforcement of beneficial ownership (BO) disclosure as a structural enabler of IFFs; one that makes most other illicit pathways possible and, critically, undetectable. Persistent reliance on manual record-keeping, non-verifiable production reporting, and incomplete export documentation significantly reduces transparency across the mining value chain.

Over 70% of mining activity in Nigeria is dominated by artisanal and small-scale mining (ASM). Many artisanal miners and cooperatives operate without licenses, receipts, digital records, or traceability documentation. An estimated 80% of mining in North-West Nigeria particularly in Zamfara, Katsina, and Kaduna States is carried out illegally.