The mining sector has been identified as a priority sector to the nation’s diversification drive. The sector, no doubt, holds great potentials for substantial increase in national income and export. The mining sector has critical backward and forward linkages with other sectors: modern industrial activities revolve around minerals and metals. In recognition of the potentials of the mineral sector, the Nigerian government officially declared the year 2007 as Minerals and Mines Year (MAMY). It further enacted the Nigerian Mineral and Mining Act 2007 and operationalized the Act in 2009 through the National Minerals and Metals Policy. However, the performance of the Nigerian mining sector has been far below the performance projections: in 2016, it was reported that the mining sector contributed only 0.13% of GDP and 0.16% of non-oil export. Since the operation and performance of the mining sector is largely contingent on the legal, institutional and regulatory framework, this study examined the NMMA with a view to evaluating its provisions. This study critically assesses the fiscal incentives provided in the Mineral and Mining Act 2007 with the aim of determining how well the incentives have stimulated the growth and development of the sector and the economy at large. The findings indicate that the greatest problem facing the Nigerian mining sector is poor enforcement of the Mining Act. The study also reveals that the Act inadvertently reinforces the operation of illegal miners through its stringent licensing conditions. The implication of this is gross revenue loss to the government and non-compliance with EIA requirement. The study therefore recommends that the Act be reviewed to accommodate the NEITI principles which would enhance transparency in the mining sector. It is also recommended that the Act be reviewed to allow for grant of license to cooperative societies as a mitigant to illegal mining operation. Given that foreign direct investment to the mining sector is relatively low despite the attractive fiscal incentives provided in the Act, it is also recommended that the nation takes pragmatic step to minimize rising economic, political and security risks, boost infrastructural development and stop illegal mining.
