By Dr Austin Maho
Nigeria’s mining sector is approaching a decisive milestone with the anticipated 2026 validation under the Extractive Industries Transparency Initiative (EITI). For the Nigeria Extractive Industries Transparency Initiative (NEITI), the review is not a procedural exercise but a structural credibility test that could reshape governance standards across the extractive industry.
According to NEITI Executive Secretary Musa Sarkin-Adar, the upcoming validation is “an outcome-oriented credibility test,” emphasizing that performance will be measured not only by formal compliance but by tangible governance improvements and stakeholder impact.
The 2026 assessment will evaluate Nigeria against the 2023 EITI Standard, which strengthens requirements in project-level reporting, beneficial ownership transparency, contract disclosure, and systematic revenue reporting. A strong outcome would reinforce Nigeria’s reform narrative and bolster investor confidence; weak performance could signal governance vulnerabilities to international partners and capital markets.
Structural Gaps in the Mining Framework
NEITI’s audit cycle has repeatedly identified discrepancies between declared production volumes and royalty payments, incomplete disclosures by certain operators, and limited public accessibility of licensing and contract data. These systemic weaknesses expose the sector to revenue leakages and undermine regulatory coherence. The 2023 EITI update expands transparency obligations to include full beneficial ownership chains—including state-owned enterprises—and mandates systematic disclosures rather than ad hoc reporting. Nigeria’s current mining legislation does not comprehensively codify these requirements, prompting NEITI’s push for legislative alignment.
Policy analysts note that without statutory embedding of disclosure requirements, enforcement remains fragmented and compliance uneven.
Reform Objectives: Legal Alignment and Institutional Strengthening
The proposed reform agenda is two-pronged:
Align Nigeria’s mining laws with international best practice.
Strengthen NEITI’s institutional authority.
Currently, NEITI functions primarily as an audit and advisory body. Reform proposals include granting statutory enforcement powers—enabling the agency to compel timely reporting, impose administrative sanctions, and ensure implementation of audit recommendations.
Discussions within policy circles have also referenced the possibility of a New Solid Minerals Reform Act, deployment of a real-time mining cadastre portal, and community consent frameworks. If implemented within the next 12 months, these initiatives would modernize regulatory architecture and support systematic disclosures ahead of the validation cycle. Governance experts argue that enforcement authority is central to closing the gap between transparency reporting and actual accountability outcomes.
Implications for Foreign Operators, Including Chinese Enterprises
The reforms apply uniformly to all operators. Foreign firms—including Chinese mineral enterprises—would be required to comply with:
Detailed project-level financial disclosures;
Mandatory reporting of ultimate beneficial ownership;
Standardized royalty structures to reduce discretionary practices;
Enhanced audit scrutiny of production, exports, and community obligations;
Industry representatives from Chinese firms have publicly maintained that they comply with Nigerian laws and contribute to local mineral processing and employment. The reform agenda is not nationality-specific; it is designed to institutionalize sector-wide governance standards and ensure competitive neutrality.
While compliance costs may rise in the short term—particularly regarding accounting systems and reporting infrastructure—investors generally benefit from long-term fiscal clarity and regulatory predictability.
Addressing Illicit Financial Flows
Transparency reforms are also positioned as tools against illicit financial flows (IFFs). NEITI has consistently warned that opacity within the mining sector heightens vulnerability to leakages, particularly given Nigeria’s significant share of extractive-related financial outflows within Africa.
Under the revised EITI Standard, systematic disclosure of production, export, and payment data enables cross-verification among customs authorities, tax agencies, and mining regulators. Embedding anti-money laundering and counter-financing of terrorism (AML/CFT) safeguards across the mineral value chain further strengthens detection mechanisms.
Multi-stakeholder coordination, government, industry, and civil society,remains central to this approach.
Contract Stability and Legislative Timeline
Existing contracts remain legally binding. However, companies will be required to align operational practices with any new statutory disclosure requirements. Where ambiguities exist, regulators and operators may undertake harmonization to ensure consistency with transparency standards.
Given Nigeria’s legislative procedures—including National Assembly readings, stakeholder consultations, passage, and presidential assent, full implementation of reforms is realistically projected for 2027, even if prioritized ahead of the 2026 validation. Secondary regulations and implementation guidelines would follow, particularly if NEITI is granted enforcement authority.
Measuring Reform Effectiveness
If institutional reform is enacted, NEITI would be expected to develop measurable indicators to demonstrate impact. Potential metrics include:
Reduced discrepancies between production data and royalty payments;
Functional and publicly accessible beneficial ownership registries,
A reliable, digitized licensing database; Integration of customs/export data with mining regulatory records;
Improved revenue collection efficiency;
These indicators would provide empirical evidence of governance strengthening beyond validation scoring.
Message to Chinese Investors
NEITI’s message to Chinese enterprises is clear: Nigeria welcomes investment but expects transparency, compliance, and alignment with international standards.
By adhering to enhanced disclosure requirements and governance reforms, Chinese companies can position themselves as strategic partners in Nigeria’s economic diversification agenda. Transparency, in this context, is not adversarial—it is reputational capital.
A successful validation outcome would demonstrate that Nigeria has:
Institutionalized project-level reporting;
Established effective beneficial ownership transparency;
Improved revenue assurance mechanisms;
Strengthened enforcement capability;
Reduced systemic discrepancies in the mining value chain;
Beyond the validation score, success would signal that Nigeria’s mining sector is structured, predictable, and globally competitive—with NEITI anchoring accountability through strengthened legal and institutional frameworks.
Dr Austin Maho is a public affairs analyst and the publisher Daybreak Nigeria
