Digging for Diplomacy: Nigeria-South Africa Mining Memorandum of Understanding
Aryana Ris-Luamháin | 16 May 2025
Summary
Nigeria and South Africa have signed a Memorandum of Understanding (MoU) to strengthen their bilateral ties in the mining sector.
The MoU is poised to unlock Nigeria’s substantial unexploited mineral wealth by leveraging South Africa’s advanced mining expertise, creating a mutually beneficial partnership aimed at economic growth and regional integration.
A significant risk to the MoU’s success is Nigeria’s underdeveloped infrastructure, which is likely to cause immediate and ongoing delays, hampering the extraction and export of minerals.
Nigeria and South Africa have signed a Memorandum of Understanding (MoU) to bolster their cooperation in the mining sector. The agreement is a landmark step in the strengthening of their bilateral ties.
According to the MoU, the two nations will collaborate on several projects, including drone mapping, the sharing of mining data and exploration. Minister of Solid Minerals Development, Dele Alake, noted that the agreement “will serve as a cornerstone for facilitating knowledge and technology transfer, investment promotion, capacity building, regional integration, and value addition.”
The agreement builds upon the Nigeria-South Africa Bi-National Commission, reinforcing entrenched historical ties between the two nations. Nigerian President Bola Tinubu has previously emphasised the importance of their partnership, stating that it is “not a matter of choice, but of destiny that includes a historical responsibility that we hold the African people.”
The MoU forms part of a broader pattern of growing engagement between the two countries. For instance, South Africa also recently invited Nigeria to host a G20 event in Abuja. Concurrently, the agreement comes amidst a recent rift between South Africa and the US, stemming from the former’s land reform policies, which may further incentivise South Africa to consolidate its partnerships with key African allies.
The MoU holds significant potential for Nigeria as it possesses 23 commercially viable mineral resources that largely remain unexploited. Currently contributing to less than 1% of GDP, the mining sector is hampered by underinvestment, inadequate infrastructure and an illegal mining trade that devastates the economy. Nigeria has long sought to grow the sector, highlighting its intent with recent moves such as an MoU with France focused on galvanising mining activities. South Africa’s expertise in this area, ranking 5th globally in terms of its contribution to GDP, is well-positioned to provide valuable support to Nigeria. This creates a mutually beneficial dynamic, where South Africa's established industry can facilitate opportunities and potential access, and Nigeria can provide resources for South Africa’s economic gain.
However, Tinubu has emphasised that it is the implementation, not the signing, of MoUs that has resulted in its success. In this respect, Nigeria’s underdeveloped infrastructure poses a significant risk to realising the agreement’s potential. Inadequate transport links, power supplies and processing facilities could restrict the extraction and export of minerals. These bottlenecks can lead to delays and increase the expense of projects.
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Forecast
Short-term (Now - 3 months)
The short term will likely see foundational work commence. However, the significant structural challenges within Nigeria’s mining sector, particularly infrastructure, will likely quickly become apparent and temper the pace of large-scale operational collaboration and investment.
Medium-term (3-12 months)
South Africa is likely to reinforce its bilateral ties with Nigeria further, which will likely take the form of more substantial partnerships that extend beyond the mining sector.
For Nigeria, the MoU will likely boost its economy, diversifying it away from oil, creating new job opportunities and establishing an alternative source of revenue for the government.
Long-term (>1 year)
The MoU has a realistic possibility of positioning Africa as a key player in the global energy transition through critical minerals such as lithium, cobalt, and copper. This would likely open up new markets for Africa, giving it a greater voice in global climate and energy discussions.
