Artisanal and small-scale mining (ASM) accounts for over 70% of Nigeria’s mining activities, providing livelihoods for millions, yet its informal nature leads to substantial tax losses for both federal and state governments, according to the UNDP.
A February 2025 report by the Nigeria Economic Summit Group (NESG) suggests that stronger cooperation between federal and state authorities could help regulate this sector more effectively. Currently, mining governance is heavily centralized, with states playing a limited role in issuing licenses and overseeing operations. NESG recommends granting states full control over licensing artisanal miners, which could streamline regulatory processes, improve oversight, and enhance monitoring of mineral production and sales.
The idea of “mixed federalism” in resource management is not new. A 2024 UNDP report titled Transforming Nigeria’s Artisanal and Small-Scale Mining Sector for Resource Mobilization and Sustainable Development cites Ethiopia as an example of successful decentralized mining governance. Ethiopia’s model allows regional authorities to handle mining licenses, engage local communities, and ensure fair revenue distribution between central and regional governments.
Ethiopia has also tackled key issues in ASM by providing miners with training, equipment, and official market access through mineral purchasing centers. These initiatives have significantly reduced smuggling and enhanced resource traceability. The formalization of over 100,000 miners into cooperatives and another 50,000 into micro and small-scale enterprises led to a sharp rise in gold production. The National Bank of Ethiopia’s gold purchases increased from 735 kilograms in 2009 to 8,386 kilograms in 2013.
Beyond licensing, Nigeria’s ASM sector faces additional challenges, including widespread illegal operations, a shortage of mineral buying centers, skepticism among miners regarding official marketing systems, and insufficient government-backed financial and technical support. Without addressing these hurdles, efforts to formalize the sector may continue to stall.
