In all, Nigeria earned an underwhelming sum of N818.04 billion from the solid minerals sector in the last 15 years, despite its huge deposit of natural resources, the Nigeria Extractive Industries Transparency Initiative (NEITI), disclosed on Monday.
Also, on a yearly basis, the country’s revenue from the sector was N193.59 in 2021, showing an increase of N60.32 billion or 51.89 per cent growth, when compared to the 2020 revenue flows of N116.82 billion.
For context, a former Minister of State for Mines and Steel Development, Uche Ogah, in 2021 alleged that owners of private jets in the country were responsible for the high cases of illegal smuggling of gold outside the shores of Nigeria.
Ogah made the disclosure to the Senate in Abuja at an investigative hearing on $9 billion annual loss to illegal mining and smuggling of gold. That amount is bigger than the entire monies realised in the 15 years from all solid minerals from 2007 to 2021.
This information, among others, were contained in the latest industry report of the solid minerals sector released by the Dr Ogbonnaya Orji-led organisation in Abuja.
“This contribution, though a significant increase over past years, is still abysmal considering the potential of the sector to the Nigerian economy,” NEITI stated.
The report, the 12th in the series , covered actual payments by 1,214 companies operating in the sector and receipts by three government agencies. It also considered the quantities of minerals that they produced, utilised and exported from the sector, reconciled the physical/financial transactions and undertook special verification on some processes.
Of the amount in the year under consideration, the Federal Inland Revenue Service (FIRS) collected bulk of the revenue of N169.52 billion, the Mining Cadastre Office generated N4.3 billion while the Mining Inspectorate Department generated a total of N3.62 billion.
The total revenue that accrued to the government during these years, NEITI said, was N818.04 billion, which the report pointed out, is significantly low compared to the economic potential of the sector.
Of the N6.62 trillion total government revenue in 2021, the solid minerals sector, NEITI said, barely contributed 2.6 per cent.
The total volume of solid minerals used or sold in 2021 was 76.28 million tons with a royalty payment of N3.57 billion, the organisation said, with the minerals with the largest production volume in the year under review being granite, limestone, laterite, clay and sand.
Dangote Plc accounted for the highest production in the year under review with a total production of 28.8 million tons while Bua and Lafarge accounted for 8.4 and 4.3 million tons. Zeberced Group accounted for 3.3 million tons.
The NEITI report also pointed out that Ogun state recorded the highest production in the year under review, with a total of 17.5 million tons, followed by Kogi state with 16.3 million tons and Edo with 8 million tons. The least production volume was recorded in Borno State with 25,500 tons.
NEITI also noted that there were increases in the number of licenses issued within the period. A total of 2,045 licenses were issued with exploration licenses accounting for 840 (increase of 62.79 per cent), Small Scale Mining Lease (SSML) 771, Quarry Lease 255, Reconnaissance Permit 139 and Mining leases 40.
On Export, the total minerals exported in 2021 was 142.54 million tons with a Free on Board (FOB) value of $101.29 million, showing an increase of 138.57 per cent from the $42.46 million reported in the 2020 report, the report stated.
“However, the solid minerals contribution to export value in 2021 was a mere 0.24 per cent,” NEITI said.
China was identified as the principal destination of Nigeria’s mineral exports, accounting for 97 per cent and 88 per cent of the export volume and value. Other destinations for Nigeria’s minerals include Malaysia, Korea, Thailand UAE in that order.
On solid minerals contribution to the economy, the NEITI report revealed that the sector contributed 0.63 per cent to Gross Domestic Product (GDP).
“While there has been some improvement compared to previous years where it contributed 0.45 per cent in 2020 and 0.26 per cent in 2019, the sector has not yet reached its full potential in making a significant impact on the overall Nigerian economy,” NEITI added.
The report identified a total sum of N1.06 billion as outstanding company liability to the government within the period under review.
“The liability was as a result of the failure of some of the companies to pay their annual service fees for the respective mineral titles,” NEITI said.
Speaking at the event, Orji stated that the striking feature in the report showed courageous findings and recommendations expected to shape future policy decisions, yield the desired impact by blocking leakages and growing government revenues if effectively implemented.
While thanking the indigenous firm, Amedu Onekpe & Co that carried out the audit, he explained that the report was based on information and data mandatorily but voluntarily provided to NEITI by relevant government agencies and companies covered by the NEITI process.
Also in his remarks, the Speaker of the House of Representatives, Tajudeen Abbas, pledged that the lawmakers will do everything within their powers to equip NEITI with stronger statutory powers, through legislative amendments on the NEITI Act.
Abbas, who was represented by the Chairman, House Committee on Urban Development, Awaji Abiante, noted that this will be geared towards enabling NEITI carry out its task of ensuring transparency and accountability in the extractive industry.
He also pledged that the report will be laid on the floor of the House and debated extensively.
In his comments, the Secretary to the Government of the Federation, George Akume, lauded Orji for providing the leadership when it was most needed in the absence of a board, especially to deliver the report.
“The administration of President Bola Tinubu has taken note of the courageous and exemplary manner in which NEITI has been discharging its responsibility, a model for other government institutions to adopt,” he noted.
Akume, who was represented by the Permanent Secretary in his office, Dr Morris Mbaeri, stated that the administration was fully committed to the fight against corruption in the extractive industry in particular and in the other sectors of the economy.
“As an administration, we are convinced that the revival of our economy and the eight-point agenda that we recently unfolded cannot yield the desired result if we do not support and strengthen anti-corruption and reform-oriented agencies like NEITI,” he explained.
“It is very gratifying to note that the focus of the report is on blocking leakages and growing government revenues in the sector. Government therefore appreciates the fact that the report examined the payments that mining companies made to the government, and the funds that the government actually received into its coffers from all revenue streams during the covered period,” he said.
Emmanuel Addeh
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