Analysis of the Economic Contribution of Small-Scale Mining to Local Government Revenues in Nasarawa State

Small-scale mining is a significant but poorly documented economic activity in Nasarawa State, and analysing its contribution to local government revenues provides evidence for mineral resource governance and rural development. This study analysed the economic contribution of small-scale mining to local government revenue in Lafia, Nasarawa, and Kokona Local Government Areas, Nasarawa State, North Central Nigeria. Secondary data on mining licences, royalties, and LGA revenue records were obtained from the Nasarawa State Ministry of Mines and relevant LGA finance offices. Primary survey data were collected from 120 small-scale mining operators across three mineral types (solid minerals, gemstones, and quarry materials). Descriptive analysis, revenue impact estimation, and value chain analysis were applied. Results showed that small-scale mining generated an estimated N3.4 billion annually in the three surveyed LGAs but formal royalty revenue captured by LGAs was only N180 million (5.3 percent of estimated value). Employment in the sector was estimated at 14,800 persons in the three LGAs. Value added per mining worker averaged N182,000 annually. Informality constrained revenue capture, with 68 percent of operators unlicensed. Environmental rehabilitation funds were absent from the sector entirely. The study concludes that small-scale mining is a significant economic activity generating inadequately captured government revenue. Recommendations include licensing reform, mobile royalty collection systems, environmental levies, and LGA capacity building for mining sector revenue administration in Nasarawa State.

Keywords: small-scale mining, local government revenue, Nasarawa State, mineral resources, informal economy