Nigeria struggles to convert mineral wealth into state revenue

Nigeria faces a significant economic and security challenge known as the ‘resource curse,’ where vast mineral wealth has not translated into prosperity for its citizens. Despite possessing over 44 commercially viable minerals across 500 locations—including gold, lithium, iron ore, and crude oil—many communities hosting these resources experience high levels of violence, banditry, and terrorism.

Analysis of state budget implementation reports shows a stark divergence in how subnational governments manage these assets. While some states struggle to convert natural wealth into revenue, others have seen massive growth in internally generated revenue (IGR). For instance, Enugu recorded a 1,519 percent increase in IGR between 2022 and 2025, rising from N25.12 billion to N406.77 billion. In contrast, resource-rich states such as Yobe, Sokoto, Kebbi, Taraba, and Ebonyi remain at the bottom of IGR rankings, leaving them heavily dependent on federal distributions.

The struggle for resource control is rooted in historical shifts in governance. Following independence, regions maintained significant control over their resources. However, the Petroleum Decree of 1969 and the Land Use Act of 1978 centralized mineral ownership under the Federal Government, creating a landlord-tenant dynamic between the state and host communities.