MECHANISMS OF RENT CAPTURE AND DISTRIBUTION IN TARABA STATE’S MINING SECTOR, NIGERIA

Abstract

The mining sector remains a critical source of economic rents in resource-rich regions; however, the processes through which these rents are captured and distributed often determine whether mineral wealth contributes to sustainable development or reinforces inequality. This paper examines the mechanisms of rent capture and distribution in Taraba State’s mining sector, with particular attention to the interaction between formal regulatory frameworks and informal governance practices. Drawing on a political economy and institutional analysis approach, the paper explores how rents are generated through licensing, royalties, taxation, and negotiated agreements, and how these rents are subsequently allocated among state institutions, mining operators, local elites, and host communities. Using both qualitative and quantitative data, the findings reveal that while formal legal and fiscal instruments exist to regulate rent capture, weak enforcement and pervasive informality significantly distort rent distribution. Consequently, a substantial portion of mining rents is captured by a narrow group of actors, thereby limiting the developmental impact of the sector at the state and community levels. The paper recommends reforms aimed at promoting more equitable and sustainable rent distribution in Taraba State’s mining sector.