Nigeria is losing an estimated $9 billion every year to illegal mining and the smuggling of gold, with criminal mineral cartels exploiting insecurity in resource-rich communities to sustain illicit operations, a new report has claimed.
The report, titled "The Shadow Owners" and published by the Alliance for Economic Research and Ethics (AERE), argued that much of the violence in states including Zamfara, Kaduna, Plateau, Niger, Nasarawa and Benue is increasingly linked to the struggle for control of valuable mineral deposits such as gold, lithium and uranium.
According to the report, the armed groups operating in these areas are only the visible actors, while the principal beneficiaries are allegedly hidden behind offshore shell companies that profit from the illegal extraction and export of Nigeria's mineral resources.
AERE estimated that the country loses about $9 billion annually through illicit mining activities and gold smuggling, warning that the growing underground economy is not only depriving the nation of critical revenue but also intensifying insecurity and worsening food inflation.
The report noted that the concentration of violent attacks closely corresponds with locations hosting some of Nigeria's richest mineral deposits, suggesting that insecurity has increasingly become a strategy for taking control of mineral-bearing communities.
It further stated that by early 2025, more than 1.3 million internally displaced persons had been recorded across the North-Central and North-West regions, creating conditions that allegedly enable illegal mining operators to expand their activities with limited resistance from local populations.
Drawing parallels with the Democratic Republic of Congo, the report warned that Nigeria could face a similar resource-conflict crisis in which armed groups dominate mining communities, minerals are smuggled across international borders, and proceeds are diverted to offshore financial networks instead of contributing to national development.
The report also questioned how displaced host communities could exercise their legal rights to free, prior and informed consent as provided under the Nigerian Minerals and Mining Act when insecurity has forced many residents to abandon their ancestral lands.
Beyond the loss of mining revenue, AERE said the illegal exploitation of solid minerals is also undermining agricultural production, particularly across the Middle Belt, traditionally regarded as Nigeria's food-producing region.
It explained that the displacement of farming communities and the conversion of agricultural land into conflict-prone mining zones have reduced food production and contributed significantly to rising food prices across the country.
According to the report, food inflation is increasingly being driven by insecurity, displacement and the illegal exploitation of mineral resources, rather than market forces alone.
Meanwhile, Chairman of the Alliance for Economic Research and Ethics, Dr. Dele Oye, criticised Nigeria's foreign investment and diplomatic missions, describing many of them as costly engagements that yield limited economic returns.
In a separate policy paper titled "The Cultural Key: Why Nigerian Businesses and Government Delegations Fail Abroad and How to Master Cross-Cultural Commerce," Oye argued that many official overseas trips produce little beyond ceremonial meetings, photographs and memoranda of understanding that rarely translate into concrete investments.
He said many government investment missions are undertaken without clearly defined commercial objectives, resulting in poor outcomes despite substantial public expenditure.
According to Oye, inadequate understanding of international business culture remains one of the major obstacles limiting Nigeria's ability to attract sustainable foreign investment.
He noted that countries such as Japan, Germany, China, Türkiye, Canada and the United States operate within distinct cultural and institutional business environments that require thorough preparation, trust-building and structured engagement before investment negotiations can succeed.
The former President of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) also faulted the practice of travelling with large government delegations, arguing that resources would be better invested in technical preparation and effective implementation of agreements reached during foreign engagements.
To improve Nigeria's investment outcomes, Oye recommended mandatory cross-cultural training for government delegations, stronger collaboration with the Nigerian diaspora, effective monitoring of memoranda of understanding signed abroad and the establishment of cultural advisory units within government institutions.
He maintained that such reforms would enhance Nigeria's negotiating capacity, boost investor confidence and ensure that future international engagements deliver measurable economic gains rather than symbolic diplomatic achievements.
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