Licence Fees vs Royalties: How Nigeria’s Mining Ministry Undermines Production

Nigeria’s Solid Minerals Development Ministry has recorded N68 billion in revenue for 2025. Yet most of this growth stems from sharp hikes in licence and application fees rather than actual mining royalties. Disaggregated data for December 2025 shows fees accounted for 62% of collections, while royalties lagged. Major licence fee increases from July 2024 spiked revenue but did not reflect higher output. At the same time, nearly 3,800 licences were revoked since 2023, and data gaps prevent independent verification of royalty collections—especially for lithium exports to China. Compared with benchmark jurisdictions like Western Australia and Ontario, Nigeria’s fees are far higher, while required exploration work and data transparency remain minimal. The recent transfer of royalty collection to the Federal Inland Revenue Service is a step toward reform, but true change demands published breakdowns, market-linked royalty valuations, and a regulatory framework that rewards—rather than penalises—legitimate operators.

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