Call for 10% Benefits to Host Communities in Nigeria’s Mining Sector
Stakeholders in Nigeria’s solid minerals sector have urged the payment of 10 per cent benefits to host communities as a means to foster peaceful coexistence between miners and local residents. Additionally, they proposed a shift from the current 25-year renewable mining lease to a 10-year term to increase accountability and responsiveness from operators.
These propositions were brought forward on Wednesday during a public hearing on the “Nigeria Mineral Development Company Limited (Establishment) Bill 2023,” organised by the House of Representatives Committee on Solid Minerals.
Tobias Lengs, representing the Renevlyn Development Initiative, highlighted the severe health risks and environmental degradation caused by mining activities, lamenting the lack of adequate care for miners in host communities. Lengs recommended an upward review of the net extraction value revenue allocated to Community Development Associations, suggesting it be periodically reassessed.
“The 25-year mining lease is excessively long and allows operators to act with impunity, costing the nation significantly,” Lengs stated. “A 10-year lease would compel greater accountability and responsiveness.”
He also advocated for a flexible community development agreement that allows host communities to allocate funds based on their changing needs rather than being tied to specific line items.
Representatives from the Environmental Defenders Network and the Nigerian Geological Survey Agency criticised the bill for centralising too much power with the minister, calling for the inclusion of other relevant ministries, such as the Ministry of Environment, in the decision-making process.
Ms. Lumun Feese of the Nigerian Economic Summit Group noted that despite new laws aimed at improving the sector, the mining industry’s contribution to Nigeria’s economy remains below one per cent of GDP as of 2015. The government’s 2016 industry roadmap targets a three per cent GDP contribution by 2025, but progress has been slow.
“The sector’s impact on the economy is still suboptimal,” Feese said. “However, the committee’s efforts to address the decline are commendable, and deliberate government actions are needed to promote good governance in the mining sector.”
In his opening address, committee chairman Jonathan Gbefwi stressed the importance of government involvement in the mining industry to ensure proper regulation and fair benefits for host communities. “A robust regulatory framework and government participation in the sector are essential for Nigeria’s economic growth,” Gbefwi concluded.
