FG woos foreign investors with low production cost

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Covenant Umoru

For a number of years, Nigeria’s low investor base has hampered the nation’s ability to thrive economically. This issue is caused by a number of variables. The absence of sufficient infrastructure, such as dependable power supplies, transportation, and communication networks, is a significant contributing factor. The high expense of doing business and the difficulties in negotiating unstable infrastructure put off potential investors. The corruption and red tape that Nigerian entrepreneurs must deal with in order to launch and run a firm are additional factors. These difficulties deter potential investors, both domestic and foreign, which restricts the amount of capital coming into the nation.

Moreover, the issue of insecurity further deters investors from Nigeria. The country has been grappling with various security challenges, including terrorism, militancy, and communal clashes. These concerns create an uncertain environment for businesses and investors, leading them to seek more stable and secure investment opportunities elsewhere. Additionally, the lack of political stability and consistent policy implementation makes potential investors wary of committing their resources to Nigeria, as they fear sudden changes in regulations or government policies that may negatively impact their investments.

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Recently, the Federal Government assured foreign investors interested in the Nigerian mining sector of conducive business environment and low production cost to boost their profitability. The Minister of Solid Minerals Development, Dr Dele Alake said this while addressing global stakeholders at “Mines and Money Conference” which opened in United Kingdom on Tuesday. The Minister, Alake called for more investment in Nigeria, listing unique advantages such as lower production cost due to surface mining and billions of dollar untapped minerals.

He quoted recent reports by audit firm KPMG, which reported that the contribution of mining to Nigeria’s Gross Domestic Product (GDP) rose from 0.3 per cent to 0.85 per cent in 2022, indicating 0.63 per cent year-on-year growth. “The country’s geological bounty encompasses more than 44 distinct mineral types found in exploitable quantities across more than 500 locations.

“Recently, recognising the evolving global landscape, and in response to emerging trends, lithium has been included as a crucial strategic mineral of global consequence,” he said

Alake said that the administration of President Bola Tinubu had embarked on reforms to boost investment by streamlining procedures and reducing hurdles to attract foreign investors.

He highlighted fresh data revealed by the Airborne Geophysical Survey, and Memorandum of Understanding (MoU) with German firm Geoscan to gather more data on solid minerals across the country. The minister also cited access to finance through a new funding facility inaugurated by the Africa Finance Corporation and the Solid Minerals Development Fund as incentive for investors. He reminded the global mining community of the Federal Government’s policies on how mining operations must benefit the communities and lead to processing instead of wholesale export of raw minerals.