By Tekena Amieyeofori
Crude oil resources had descended upon Nigeria like manna from heaven in the 1970s. Between 1970 and 1975, government revenue grew by over 1,100%, creating surplus funds that overwhelmed the country. The oil windfall was so unprecedented that General Yakubu Gowon admitted, in 1973, that “money is not Nigeria’s problem, but how to spend it”.
The sudden wealth was a blessing. But it also triggered a spending spree. Nigeria reportedly gave out loans to countries and international financial institutions, including the UK, World Bank and IMF. Some notable beneficiaries of Nigeria’s financial assistance between 1973 and 1975 were Guinea Bissau, Cape Verde, Mozambique and Sao Tome and Principe. In 1985, under the Ibrahim Babangida administration, the Nigerian Technical Aid Corps (TAC) was introduced to support fellow African countries financially and assist them with manpower development. This was how Nigeria became the “giant of Africa”.
In a tragic twist of fate, Nigeria was plunged into an acute economic crisis in 2015, following global collapse in crude oil prices. This has resulted in high inflation, depreciating currency and significant debt burdens. In the 2025 fiscal year, debt servicing gulped 25% of the budget, while the government earmarked 15.53 trillion naira, approximately 26.7% of the total 52.52 trillion naira, for debt servicing in the 2026 budget proposal.
Nigeria’s economic misfortune came as a result of lack of adequate planning in revenue utilisation for long-term development. The management of the crude oil-based economy was so tardy that successive governments indiscriminately awarded oil licences to their charmed circles in Lagos and Abuja. Oil revenues went into private pockets, with most of them stashed away in foreign bank accounts. Till date, few individuals are feeding fat from oil revenues in a country that is grappling with untold macroeconomic challenges.
The misapplication of Nigeria’s oil wealth is a classic example of what Richard Auty famously coined the “resource curse” in 1993. According to Auty, when a country solely relies on a particular resource that brings economic windfalls, it loses sight of the need for diversification. The unanticipated wealth creates an atmosphere of competition among elites scrambling for their own shares of what is called the “national cake” in Nigeria. In essence, the resource curse results in massive corruption and governance failure. The outcome is an economic ruin for countries like Nigeria. With this benefit of hindsight, the country must chart a new course in the management of the solid minerals sector now generally referred to as the “new oil”.
When he came to power in 2023, President Bola Tinubu proposed an economic diversification policy for Nigeria with a $1 trillion GDP target by 2030. Since then, the solid minerals sector, identified as a major source of revenue generation, has undergone significant reforms to make it more attractive to investors.
In October last year, the House of Representatives reported an annual 41bn loss to illegal mining in the solid minerals sector.This follows the control of mining sites by unlicensed operators, including private investors, local artisanal miners and bandits using funds generated from illegal mining to finance terrorism in the country. Worried about these developments, the Federal Government, through the Ministry of Solid Minerals, revoked 1,263 mineral licences last year for failing to pay mandatory annual service fees, bringing the total number of revoked licences to approximately 4,687 since 2023. In 2024, the government of President Tinubu established a mining marshals unit in the Nigeria Security and Civil Defence Corps (NSCDC) and launched a nationwide satellite surveillance system to secure mining sites.
Fortunately, these reforms are beginning to yield results. Statistics obtained from the Federal Ministry of Solid Minerals indicate that revenues generated from the sector climbed to 38 billion naira in 2024 from an estimated 8.6 billion naira in 2022. In the ministry’s projection, this revenue profile is expected to hit 70 billion naira by 2026.
The changing global economy, largely driven by renewable energy sources, has necessitated an increased demand for solid minerals. With over 44 economically viable minerals, Nigeria is a mining destination of choice for the industrial world. Among the global economic giants seeking partnerships with Nigeria, China has gained a significant foothold with its infrastructure for minerals agreement with the country. Under the agreement, China is building local processing plants to discourage raw material exports. The Asian economic giant is also investing in critical infrastructure such as roads, railways and power systems to drive economic development. Undoubtedly, the partnership with China promotes one of the major objectives of the Africa Minerals Strategy Group, which is to transition from a historical pattern of exporting raw materials to an era of local processing for economic self-sufficiency.
There’s need for Nigeria to tread with caution in its agreement with China or any other country in developing the solid minerals sector nevertheless. This position is informed by past experience. The predatory, lopsided and inequitable agreements signed with international partners in the petroleum industry has left host communities at their receiving end. For decades, host communities have suffered untold ecological devastation from the environmentally unsustainable methods of crude oil extraction in the Niger Delta. Today the region is witnessing not only biodiversity loss, but livelihoods are seriously being eroded by the operations of treasure hunters.
Like the oil majors operating in Nigeria’s oil belt, China is guilty of duplicity regarding its commitment to environmental, social and governance policy in Nigeria’s solid minerals sector. While Beijing claims full compliance to environmental sustainability, what is obtainable in the mining fields suggests otherwise. Recent reports from independent investigations reveal that Chinese-contolled mining sites in Zamfara and Ebonyi States are operating without basic environmental and social impact assessments. No less disturbing are media reports on the involvement of Chinese nationals in illegal mining across mining locations in the country. The Chinese embassy in Nigeria has reiterated its country’s commitment to zero tolerance for illegal mining, warning Chinese nationals to strictly adhere to laws governing the solid minerals sector. In what looks like damage control, China has come up with a “Regulation Ecological Environmental Monitoring” policy that took effect on January 1, 2026. But the truth is that these are all rearguard actions taken to maintain China’s dominance in Nigeria’s solid minerals sector.
The solid minerals sector, with its huge prospects, offers Nigeria a new dawn of economic recovery. It is a second opportunity that must not be bungled with administrative lethargy. More than ever before, this is the time Nigeria needs to deploy economic statecraft in managing what promises to be its next cash cow. Deploying economic statecraft entails vigilance in choosing foreign partners to exploit its strategic minerals. It also requires transparent and accountable management of resources. In reforming the solid minerals sector, regulators must insist on environmental sustainability and respecting the socio-economic rights of host communities. This is the way to go in averting the resource curse Nigeria has had to contend with in the petroleum industry.