Energy
World Bank appraises Nigeria’s application of $120m mining credit
ABUJA – The World Bank has declared as satisfactory the implementation of about $120 million Sustainable Management of Mineral Resources Project for the revitalization of Nigeria’s minerals and metal sector.
The Bank with all it’s meticulous vetting and assessment of its programmes and projects in developing countries unabashedly praised Nigeria’s shot at a mining renaissance three decades after the demise of the sector. But, the commendation was largely anchored on what the bank regards as the prudent and judicious use of a $120 million grant it had extended to Nigeria as an incentive to resuscitating Nigeria’s solid minerals sector.
The grant, known as the Sustainable Management of Mineral Resource Project (SMMRP), is a home-grown intervention which was conceptualized after a National mining Policy dialogue in 2004. It became effective in April 2005 and was implemented through a seven-year period with an original closing date of June 2010. But the World bank granted an extension as compensation for some implementation delays which occurred earlier in the life of the project.
The $120m credit which has a 30-year repayment term with a 0.75 percent commission was taken as part of government’s emphasis on developing the non-oil sector to diversify the economy. It also conforms to the World Bank Group 2004 Joint Interim Strategy for Nigeria which was aimed at improving economic governance, creation of conditions for rapid private sector-led poverty reducing growth and enablement of local communities to take charge of their own development.
However, according to the agreement, the Federal government is expected to put in $7 million as counterpart funding, which sadly, till date, it has not.
In a document entitled: “Implementation, Completion and Results Report”, the global bank noted that in all the 15 financial and procurement audits conducted between the inception of the project in 2005 and its conclusion in May 2012, the SMMRP was satisfactory in all except the audit conducted in March 2007, in which it was rated moderately satisfactory.
The document jointly signed by the Vice President of the World Bank, Muktar Diop, Nigerian Country Director, Marie Nelie, Sector Manager, Christopher Sheldon, Project Team Leader, Ekaterina Mikhaylova, and the Primary Author, Sabine Cornelius, defended the overall satisfactory rating of the Federal Government’s Project Management Unit (PMU) which handled the project, noting that, “Despite the multiple disruptions and considerable constraints, the Project continued to function well.”
It further revealed that in the financial management of the credit, all audits were unqualified and cases of fraud were uncovered, adding that during implementation of the procurement, two-thirds of project’s procurement performance ratings were mostly satisfactory.
The report commended the Federal Government for taking over the funding responsibility of SMMRP-supported projects such as the Mining Cadastre Office and the Nigerian Institute of Mining and Geosciences, NIMG, Jos.
The Project which was flagged off in April 2005 had two main objectives, namely to increase government’s long-term institutional and technical capacity to manage Nigeria’s mineral resources in a sustainable way, and to establish a basis for poverty reduction and rural economic renewal in selected areas of the country through the development of income generating opportunities through small-scale and artisanal mining and diversifying away from oil sources of income.
According to the report, the project achieved improved governance and transparency outcomes in the well-performing state-of-the-art cadastre system, efficient management of mining licenses, strengthened institutional and technical capacity, legal and regulatory framework as well as private sector-led development, increased mining activities and increased annual royalty collection value among others.
The bank observed that the SMMRP has strengthened the capacity of key government institutions to better manage the sector. It has also improved governance and transparency which is largely responsible for the commendable inflow of foreign investments into the sector.
On governance and transparency, the report noted that the SMMRP had funded the establishment of a “well performing and world class Mining Cadastre Office. it is remarkable that Nigeria has one of the best Cadastre systems in Africa,” it stated, adding that at the closure of the Project, over 10,056 mining licenses had been issued. “This is more than twice the projections that was envisaged at the inception of the SMMRP,” it added.
The report further noted that the project has made very significant progress towards achieving its development objectives. This includes the completion of the airborne geophysical work and geo-chemical mapping studies of the country. It added that prior to the SMMRP, “the newly restructured Ministry of Mines and Steel Development (MMSD), which was housed in dilapidated physical premises and lacked adequately skilled staff.”
Indeed, the rejuvenation of mining into a tangible economic activity in Nigeria largely lies in the hands of small scale and artisinal miners, whose total number, according to a recent survey, may well be practised by two million Nigerians. But, their activities are haphazard, uncoordinated and destructive to the environment with no reclamation and add almost zero value to the central economy, as there has been no way of regulating them. The SMMRP looks at this challenge as one of its key area of focus.
In this regard, the report commended the Project Management Unit of the Ministry of Mines and Steel development for their exemplary efforts in supervising the implementation of small grants programmes in accordance with the recommendations of the World Bank safeguards audit, which has safety measures for workers as well as proper documentations for the $10 million grant given by the Project for the formalization of Artisanal and small scale miners (ASMs).
So far, not less than 400 mining co-operatives have been formed, all aimed at securing the $10 million grants. A workshop was organised for them in Jos last June so they could be taught how to draw from the grant.
It is believed that, when this category of miners get to work, according to the new mining regulation, blue chips mining firms would easily be wooed to bring in the big capital.
The Director of the Sustainable Management of Mineral Resources Project office, Mr Linus Adie, who was at the meeting, told the gathering that “this is the largest World Bank mining project, not only in Africa, but in the whole world. It came immediately after the Extractive Industry Review of the country.”
According to him, the 0.75 percent credit tied to the grant spread over 30 years repayment period, means it would be of very little burden to repay.
Industry watchers believe that Nigeria is making steady progress towards revamping the mining sector. All that is needed is a transparent running and regulation of the sector and the development of basic infrastructure that encourage big time miners to come in.
A call has gone to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) the members of the Crude Oil Refinery Owners Association of Nigeria (CORAN) to start participating in the next oil block licensing round as a strategic option for securing affordable crude feedstock for their refineries.
The Chief Executive, NUPRC, Oritsemeyiwa Eyesan, made the on Wednesday during a courtesy visit by members of CORAN to the Commission’s headquarters in Jabi, Abuja, where both parties held discussions on strengthening domestic refining capacity, crude supply sustainability, and collaboration between upstream producers and local refiners.
According to Eyesan greater participation of indigenous refiners in upstream asset ownership would help create more stable and commercially viable crude supply arrangements, while also deepening local participation across the petroleum value chain.
She further assured members of CORAN that Nigeria has sufficient crude resources to support domestic refining ambitions and reiterated the Commission’s commitment to promoting policies that prioritize in-country value addition.
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Eyesan therefore encouraged refinery operators to enter into long-term crude supply contracts with producers as a practical mechanism for ensuring predictable feedstock availability, operational planning, and pricing stability.
The NUPRC Chief however, acknowledged that infrastructure limitations must be tackled before the country can witness seamless crude supply to local refineries. She identified issues such as inadequate pipeline networks, evacuation bottlenecks, storage constraints, marine logistics, and other supply chain gaps as areas requiring urgent investment and coordinated action.
Members of CORAN used the visit to commend the Commission’s ongoing regulatory reforms and its support for domestic refining development, while also emphasizing the need for stronger implementation of frameworks that guarantee regular crude supply to local plants.
Industry stakeholders have increasingly argued that improved access to crude feedstock remains central to reducing Nigeria’s dependence on imported petroleum products, strengthening energy security, conserving foreign exchange, and creating jobs through the growth of local refining capacity.
The meeting is seen as another step in ongoing engagements between regulators and private refinery operators aimed at unlocking the full potential of Nigeria’s downstream petroleum sector.
Nigeria’s gas industry supplied 62 percent of gas produced to foreign markets in the first quarter of 2026, though the domestic demand remained largely unmet.
This was detailed in data from factsheets by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), an average of 4.832 bscf/day was produced during the quarter but allocations increasingly skewed toward exports — leaving power generation, industries, and households under pressure.
The factsheet showed that while production remained relatively stable — January (4.837 bscf/day), February (4.771 bscf/day), and March (4.888 bscf/day) — domestic utilization steadily weakened as export demand intensified.
In contrast, average daily gas supplied to the domestic market dropped to 1.906 bscf/day in January, 1.763 bscf/day in February, and 1.855 bscf/day in March, indicating that the local market is increasingly treated as a balancing segment — absorbing cuts whenever export demand rises.
At the center of this shift is the Nigeria LNG Limited, which saw gas supply to its six operational trains rise consistently from 2.931 bscf/day in January to 3.018 bscf/day in February and 3.033 bscf/day in March.
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By March, NLNG alone accounted for about 62% of total gas exports, significantly tightening volumes available for domestic use.
The factsheet showed that sharp decline in gas allocations to thermal power plants nationwide is driven primarily by allocation and offtake decisions rather than any underlying supply shortage.
Gas-to-power supply declined sharply by 25% within one quarter, dropping from 0.648 bscf/day in January to 0.536 bscf/day in February and 0.485 bscf/day in March.
This contraction directly correlates with persistent grid instability and electricity shortfalls nationwide witnessed during the quarter.
Average daily gas supply to industrial users remained largely flat — 0.431 bscf/day in January, 0.440 bscf/day in February, and 0.430 bscf/day in March — indicating that constraints on manufacturing and petrochemical output stem less from infrastructure limitations and more from inconsistent allocation of gas.
Meanwhile, Nigeria’s cooking gas market tipped into deficit.
Supply, which stood at 5,110 MT/day in January and 4,703 MT/day in February, failed to keep pace with demand in March, where 4,726 MT/day supply lagged behind 5,122 MT/day consumption, resulting in an approximately 400 MT/day shortfall.
This tightening supply to demand balance has sustained high retail prices, which ranges from N950/kg to N1,550/kg during the quarter, thereby forcing many households to revert to alternative fuels such as charcoal and firewood.
Commercial gas supply showed moderate volatility, rising from 0.573 bscf/day in January to 0.628 bscf/day in February, before easing to 0.601 bscf/day in March, showing uncertainty in supply planning for commercial users — particularly in emerging segments such as CNG-based transportation.
In contrast, supply to gas-based industries — including fertilizer, petrochemicals, and manufacturing — remained largely flat at 0.431 bscf/day in January, 0.440 bscf/day in February, and 0.430 bscf/day in March, pointing to stagnation in industrial feedstock availability.
This suggests that constraints are driven less by processing capacity and more by inconsistent and unreliable gas allocation.
Despite the Petroleum Industry Act’s intent to safeguard domestic supply through delivery obligations, findings indicate these commitments are increasingly being sidelined, as export-oriented allocations take precedence.
On the export front, combined flows through NLNG and the West African Gas Pipeline averaged about 0.156 bscf/day in Q1, reinforcing the steady outward push.
The LNG shipments alone grew by 6.4%, rising from 52,857 MT/day in January to 56,241 MT/day in March, outpacing every domestic segment.
The Dangote Refinery supplied about 72.3 percent of Nigeria’s total domestic demand for petrol in March, while consumption fell by approximately 17 percent during the period under consideration from 56.9 million litres per day in February to 47.3 million litres last month.
Besides, although still modest compared to last year’s massive importation, the share of petrol imports in the supply mix surged by 96.7 percent month-on-month, rising from 3 million litres per day to 5.9 million litres/day during the period.
Data from the March 2026 fact sheet on midstream and downstream petroleum operations provided by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) yesterday, showed that the 47.3 million litres per day consumption for march fell below the national average of 50 million litres per day.
Overrall, the data indicated that total domestic petrol supply stood at 34.2 million litres per day in March. When measured against total consumption of 47.3 million litres per day, this placed Dangote Refinery’s contribution at approximately 72.3 percent of the domestic market, reaffirming its dominant role in the country’s fuel supply chain.
However, the supply mix also reflected a sharp increase in the role of imports. The fact sheet showed that petrol import contribution rose from 3 million litres per day in February to 5.9 million litres per day in March, equivalent to a 96.7 percent jump in import share.
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However, this increase in imported petrol between February and March was despite the downstream regulator’s insistence that it has halted the issuance of import licenses to oil marketers for months.
For over a year, owner of the 650,000 barrels per day facility in Lagos, Aliko Dangote, has pushed to end petrol imports in order to, according to him, protect local refining and grow the economy. Dangote’s refinery, which began production of petrol in 2024, has argued that Nigeria’s import licensing regime undermines local refining by allowing marketers to continue bringing in petrol even when domestic supply is increasing.
The company has maintained that under the Petroleum Industry Act (PIA), imports should only be permitted when there is a clear supply shortfall, not as a parallel system competing with local production.
On the other hand, oil marketers and a cross section of Nigerians believe that leaving the market solely for Dangote, without any competition from any other refinery, especially from NNPC’s defunct Port Harcourt and Warri refineries will lead to a monopoly and inflated pump prices.
The NMDPRA fact sheet further showed that other domestic refining sources contributed only marginal volumes, specifically diesel refining. The three operational modular refineries: Walter Smith, Edo Refinery, and Aradel collectively supplied about 0.629 million litres per day of diesel during the month.
Walter Smith refinery operated at an average capacity utilisation of 59.56 per cent, supplying 0.241 million litres per day. Edo Refinery recorded 64.69 percent utilisation with 0.051 million litres per day, while Aradel posted 58.84 percent utilisation, delivering 0.337 million litres per day.
Average diesel consumption during the period stood at 14.5 million litres daily, slightly above the 14 million litres per day national benchmark, despite the rising prices as a result of the Middle East crisis, indicating sustained demand from industrial and commercial users.
Similarly, in March, aviation fuel consumption remained lower at 2.1 million litres per day compared to the 3 million litres per day benchmark for the country and against the 2.9 million litres per day supplied in February.
In the whole gas market segment, total supply averaged 4.888 Billion Standard Cubic Feet Per Day (Bscf/d). Of this, 3.033 Bscf/d was supplied to the Nigeria LNG (NLNG), representing approximately 62 percent of total gas supply.
Domestic gas supply stood at 1.855 Bscf/d, with utilisation spread across key sectors. Gas-to-power accounted for 0.485 Bscf/d, commercial consumption stood at 0.430 Bscf/d, and gas-based industries utilised 0.601 Bscf/d.
In the Liquefied Petroleum Gas (LPG) segment, the NMDPRA data indicated that demand outpaced supply during the period. Average daily supply stood at 4,726 metric tonnes, while consumption reached 5,122 metric tonnes per day, leaving a shortfall of 396 metric tonnes daily. Also, retail LPG prices ranged between N980 and N1,450 per kilogramme nationally.
Fuel sufficiency data showed that petrol stock levels stood at 21 days, including pumpable volumes at the Dangote Refinery, diesel sufficiency was 55 days, aviation fuel stood at 109 days, and LPG at 14 days.
In the same vein, the midstream and downstream regulator put the Ajaokuta-Kaduna-Kano (AKK) gas pipeline completion level at 79.23 per cent; OB3 River Crossing at 59.50 per cent and the Odidi-Warri Expansion Project (OWEP) at 67.34 per cent completion rate.
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