Nigeria’s President Muhammadu Buhari on Thursday expressed hopes that the country’s new gold reforms will earn the government $500 million a year in royalties and taxes and create 250,000 jobs.

The new reform is aimed at reviving the country’s abandoned mining sector. In February, Nigeria licensed two gold refineries mainly to produce gold for the central bank to hold in its reserves and also for export.

This is in line with the Federal Government’s overall Economic Transformation Agenda, aimed at diversifying the Nigerian economy away from oil-dependence and ensuring the sector contributes more to the gross domestic product.

In adherence to the reform, the federal government inaugurated the country’s first gold and precious metals refining conglomerate. The reforms have also made artisanal mining legal and will create gold buying centres and tax trade of the precious metal. “These operations will help in diversifying our revenue base,” President Buhari said, adding that the country has lost a total of $3 billion from 2012 to 2018 because of illegal gold mining. 

Despite Nigeria’s mineral wealth, which includes untapped deposits of 44 minerals including gold, iron ore, coal, tin and zinc, in more than 500 locations, mining makes up just 0.3 percent of the economy.

In the 1970s, mining was a major source of revenue in Nigeria, with significant production of coal, tin, and columbite. But with the discovery of crude oil in the Niger Delta region, the nation focused solely on petroleum products, neglecting the mining sector. The underdevelopment is resulting in Nigeria having to import processed minerals, which could be locally produced.

The reforms increase the government’s chances of achieving its 2025 goal of raising the mining industry contribution to GDP to 3 percent. More so, as the country battles with the economic impact of the coronavirus pandemic and falling oil prices, the extra revenue from gold could be a lifeline, experts say.