By Marvellous Nyang
March 2, 2026
Nigeria and the Africa Finance Corporation (AFC) have agreed a landmark Memorandum of Understanding to develop a $1 .3 billion alumina refinery project in a strategic partnership aimed at transforming the country’s mining sector and boosting economic diversification.
The Federal Government, acting through the Solid Minerals Development Fund (SMDF), and the AFC signed the pact in Abuja, marking the largest single funding commitment in the history of the SMDF and signalling a new phase of value addition in Nigeria’s solid minerals industry.
Under the agreement, the consortium will build a state‑of‑the‑art alumina refinery designed to process about 1 million tonnes of bauxite ore annually using modern Bayer‑process technology.
An on‑site gas‑fired cogeneration plant will supply steam and power for the facility, which is expected to operate for around 20 years at a 95 per cent utilisation rate, producing an estimated 19 million tonnes of alumina over its lifespan.
Officials described the refinery as a transformative milestone for Nigeria’s industrialisation drive and economic reform agenda.
Minister of Solid Minerals Development Dr Dele Alake said the deal would significantly enhance the mining sector’s contribution to gross domestic product and position the country as a competitive destination for mineral investment in global markets.
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The refinery project is forecast to contribute about $1 .2 billion annually to Nigeria’s GDP, inject more than $25 billion into the national economy over its lifecycle, and generate roughly $8 billion in foreign exchange earnings, officials said.
Fatima Shinkafi, Executive Secretary of the SMDF, described the agreement as the agency’s largest funding milestone since its establishment, underscoring confidence in the Ministry’s value‑addition policy.
As part of the broader pact, the SMDF and AFC also agreed to establish a joint strategic investment vehicle to accelerate exploration and development of identified mineral assets across Nigeria, providing an institutional framework to unlock further investments in the solid minerals sector.
Permanent Secretary of the Ministry, Engr Farouk Yabo, said the initiative reflects a reform‑driven leadership committed to creating an enabling regulatory environment and expediting permits, titles and regulatory clearances to ensure seamless project implementation.
Analysts say the deal could catalyse downstream value chains in the aluminium industry, attract greater private capital and reduce reliance on raw export markets by driving local beneficiation, processing and export of higher‑value mineral products.
The signing ceremony was attended by senior government officials alongside the AFC leadership, including AFC President and Chief Executive Samaila Zubairu and other top executives, highlighting institutional commitment to the partnership.
