Cyril Azobu, PwC Partner and mining leader shared his insights on Nigeria’s Ministry of Solid Minerals Development’s plan to conduct a comprehensive forensic audit. As part of its efforts to clean up the mining sector and attract investors, the country is preparing for this audit.
The Minister of Solid Minerals Development, Dele Alake, highlighted that the focus will be on using satellite imagery in collaboration with the Ministry of Science and Technology to monitor activities at mining sites.
Azobu remarked, “I think this is not the first time we’ve discussed an audit. We’ve heard the minister mention a forensic audit in relation to surveillance, but the main driver seems to be revenue assurance—ensuring accurate revenue collection through royalties. We know there’s some leakage, a gap due to illegal mining, and a lack of clear documentation of activities within the sector.”
He continued, “The insufficient data on production status across mining sites, coupled with the issue of illegal mining, which is a key concern for this administration, makes deploying technology crucial. Alongside the already established Marshal Corps deployed across the 36 states, this initiative is a welcome development. While we’re not sure what form it will take, it’s certainly a positive step for the country.”
Regarding the ministry’s approach to ensuring the success of the forensic audit, Azobu said, “It depends on what the government aims to achieve. We have serious miners who comply with paying their royalties. Recently, royalty rates were increased, and the government is keen not only to protect existing players but also to attract potential investors. How this is executed will be critical.”
“In an effort to rid the sector of illegal miners, who have created significant disruption, deploying technology is essential. However, there’s also a need for synergy. For instance, Haiti regularly reviews its extractive industry, which could be a starting point for us.”
Azobu emphasised the importance of groundwork before launching a comprehensive forensic audit, saying, “Understanding what’s there—starting with the cadastre, identifying license holders, and tracking their remittances—is vital. A solid foundation must be laid before diving into an extensive forensic review.”
He also highlighted concerns among key stakeholders in the mining sector, stating, “There are numerous issues being addressed within the sector. Security is a major concern; companies with licenses often face challenges entering their mining sites due to community or security issues. Addressing these security concerns is crucial for the miners.”
“Additionally, data transparency is a key concern for prospective investors. Financing is another critical issue. The Solid Minerals Development Fund, in collaboration with the IFC, has deployed a program to provide funding, which is encouraging for junior miners and other stakeholders who now have access to loans through this partnership.”
Azobu concluded by discussing how to attract investors to Nigeria’s mining sector, stating, “In terms of mineral potential, we have it. The government’s commitment to winning investors is evident. Over the last decade, we’ve monitored progress, and there is sufficient traction. However, investors will also consider other factors.”
“For example, we’ve seen growing interest in minerals of the future, such as battery-related minerals. There’s been an increase in inquiries, and while growth has been slow, it is happening. It can always improve as we continue to build on the efforts of successive administrations,” he concluded.
