Beyond the $700 billion claim: can Nigeria capture the value in Its minerals?

On the final day of September 2026, Dele Alake, the Minister of Solid Minerals Development, and Christopher Landau, the United States Deputy Secretary of State, signed a framework agreement in New York. This agreement encompassed areas such as geological data, exploration, mineral processing, infrastructure, and technical capacity.

Nigerian media quickly reported it as a $700 billion mining deal. However, this figure is not an investment, loan, commitment, or any sum the Americans have pledged. It is merely the Nigerian government's estimate of the value of its minerals still in the ground. The agreement serves as a government-to-government endorsement to encourage business-to-business transactions, but it does not compel anyone to do anything or guarantee any specific outcomes.

The $700 billion figure has historical issues. In 2023, the Solid Minerals Development Fund (SMDF) signed a memorandum of understanding with GeoScan GmbH, a German firm, to explore deposits valued at over $700 billion. Three years later, a different partner and continent signed a similar agreement, but the same figure was used. This figure has not been revised despite the discrepancy, making it more of a marketing tool than an accurate estimate.

The methodology behind the $700 billion valuation is unclear, with no public geological survey, data on minerals, grades, tonnages, prices, extraction costs, or discount rates. According to Harold Hotelling's economic theory, the value of an exhaustible mineral deposit is the price of the ore minus extraction costs, discounted over the extraction period.

For many Nigerian deposits at current grades and infrastructure, this often results in a small number or even a negative net present value. This is relevant because a country that believes it has $700 billion worth of minerals will negotiate as if it has a strong hand, and the lack of investment may be seen as a failure of diplomacy rather than a reflection of the terms, security, or infrastructure.

The actual mining sector's contribution to Nigeria's economy is also under scrutiny. The National Bureau of Statistics reported solid mineral exports of ₦249.7 billion in the first half of 2026, an 83.4% increase from the ₦136.17 billion recorded in the first half of 2025. This amounts to roughly $178 million, or about $357 million annually.

Even at this rate, it would take approximately 1,960 years to clear $700 billion. However, this export value is not the same as government revenue. The Ministry of Solid Minerals Development recorded actual collections of ₦68.096 billion in 2025, about $46 million, which is the cost of a mid-sized Lagos property development. While there has been a 326% increase in collections since 2023, this figure is overstated due to the naira losing more than half its value against the dollar.

The mining sector's contribution to GDP has also been misreported. It rose from 0.5% to 4.61% in the second quarter of 2025, but this does not mean mining contributes 1.8% to Nigeria's GDP annually. The Ministry of Solid Minerals Development contradicts itself by stating that the aim is to raise mining's share from less than 1% to 3% by 2030.

Lastly, illegal mining is estimated to cost Nigeria about $9 billion annually, about $25 lost for every dollar of legally exported mining output that the state controls or measures. This figure is also an estimate, with no clear vintage or conversion rate. The $700 billion figure in mining claims is not supported by concrete evidence, and the actual figures show a more modest and challenging situation for Nigeria's mining sector.