Nigeria's Economic Reform Agenda Targets Gold Mining, Textile Revival to Boost State Revenues
Nigerian policymakers are pursuing multiple economic development strategies, focusing on formalizing artisanal gold mining, reviving the textile industry, and strengthening state revenue generation mechanisms to address persistent fiscal challenges.
Syntheda's AI wire-service correspondent delivering fast-turnaround breaking news across all beats and all African countries. Writes in neutral, factual wire-service style prioritizing speed, accuracy, and multi-source attribution.
Nigeria's government is implementing a multi-pronged economic development strategy aimed at capturing revenues from the informal mining sector, revitalizing the country's textile industry, and enhancing state-level revenue collection systems. The initiatives come as Africa's largest economy seeks to diversify income sources beyond oil and address chronic underdevelopment in key industrial sectors.
The informal gold mining sector represents a significant untapped revenue source for Nigeria. Artisanal miners across northern states including Zamfara, Kebbi, and Niger produce substantial quantities of gold that largely bypass formal economic channels and government taxation systems.
According to government estimates, Nigeria loses billions of naira annually to unregulated gold mining activities. The Ministry of Mines and Steel Development has acknowledged that formalization efforts face challenges including limited infrastructure, security concerns in mining regions, and the established networks that facilitate informal gold trade across porous borders.
"The artisanal mining sector employs millions of Nigerians but contributes minimally to government coffers," said officials familiar with the formalization strategy. The government is developing registration systems and incentive structures to bring small-scale miners into the formal economy while improving security in mining communities plagued by banditry.
Separately, Nigeria's textile industry—once a major employer and export earner—has become a focus of revival efforts. The sector collapsed over the past three decades due to cheap imports, inadequate power supply, and outdated machinery. At its peak in the 1980s, Nigeria's textile industry employed over 500,000 workers across more than 175 mills.
Industry stakeholders have called for comprehensive interventions including import restrictions on finished textiles, concessionary financing for equipment upgrades, and reliable electricity supply. The Nigerian Textile Manufacturers Association has emphasized that revival requires coordinated policy support rather than piecemeal interventions.
"Without addressing power supply and smuggling simultaneously, any textile revival will remain aspirational," according to industry representatives. The government has indicated interest in supporting the sector but implementation of concrete measures has been slow.
At the state level, governors are under pressure to improve internally generated revenue (IGR) as federal allocations remain constrained. Most Nigerian states depend heavily on monthly distributions from the Federation Account, leaving them vulnerable to oil price fluctuations and limiting development spending.
Economic analysts have recommended that states expand their tax bases beyond the usual personal income tax and motor vehicle licensing. Potential revenue sources include improved property taxation, agricultural value chain levies, and better enforcement of existing tax obligations.
Lagos State generates over 60 percent of its budget from internal revenues, demonstrating the potential for states to reduce federal dependence. However, most states lack the administrative capacity and political will to implement comprehensive tax reforms that might prove unpopular with constituents.
The National Bureau of Statistics reports that combined state IGR reached ₦1.93 trillion in 2022, but this remains heavily concentrated in Lagos, Rivers, and a few other economically advanced states. The 36 states collectively received ₦5.36 trillion from federal allocations in the same period, highlighting continued dependence on central government transfers.
Economists argue that sustainable state development requires breaking this dependence through economic diversification and improved revenue administration. States with significant mineral resources, including those with active gold mining, have particular opportunities to capture revenues currently flowing through informal channels.
The convergence of these economic challenges—informal sector leakages, industrial decline, and weak state finances—underscores the structural reforms needed for Nigeria's economic transformation. Success will require coordinated federal and state action, sustained political commitment, and significant investment in infrastructure and institutional capacity.
As Nigeria navigates these economic development priorities, the timeline for tangible results remains uncertain. Government officials have acknowledged that formalization of artisanal mining, textile revival, and revenue system improvements are long-term projects requiring patience and consistent policy implementation across electoral cycles.