Nigeria’s Earnings from Solid Minerals Rose to N624.45bn in 13 Years

Nigeria’s earnings from the solid minerals sector climbed to N624.45 billion in the last 13 years, a new report by the Nigeria Extractive Industries Transparency Initiative (NEITI), on Sunday indicated.

However, NEITI revealed in the document covering the year 2020, that 2,119 companies operating in the sector in the country’s solid minerals space still owed the federation over N2.76 billion in statutory annual service fees for respective mineral titles.

The organisation noted that the total revenue contributions from the sector in 2020, rose to N128.27 billion, which was an increase of over 54 per cent from the N74.85 billion recorded in 2019 despite the Covid-19 pandemic.
It also revealed that the sum of N8.89 billion was shared to the federating units as solid minerals revenue in 2020, stressing that 6,010 existing solid mineral titles were valid as of 31st December 2020, while 7,605 mining titles were issued in the industry in the past five years.

A breakdown of the earnings showed that the federal government received N4.07 billion (45.83 per cent), states and local governments received N2.07 billion and N1.59 billion (23.25 per cent and 17.92 per cent) respectively, while N1.16 billion (13 per cent) was recorded as derivation share.

On the areas covered, NEITI stated that the independent industry report tracked and reconciled financial flows in the sector, checked quantities of minerals produced, utilised and exported in 2020.

It also examined the governance and process issues in the sector, outlined key findings and made far-reaching recommendations that require urgent remedies, it added.

For instance, it disclosed that 71.1 million metric tons of minerals were produced in 2020, with a breakdown showing that the production of granite, limestone, sand and laterite were the highest contributors to minerals royalty payments recorded within the period.

NEITI further disclosed that five states of the federation topped the table, contributing 66 per cent of solid minerals produced in the country that year. These included Ogun, followed by Kogi, Cross River, Edo and Bayelsa States.

On companies’ activities that shaped business investments in the solid minerals sector, the report identified Dangote Cement Plc as the first, followed by Lafarge Plc, BUA International as well as Dantata and Sawoe with the highest production accounting for about 64 per cent of the total mineral production volume in 2020.

NEITI further disclosed that total minerals exports in 2020 was 32.99 million tons valued at $42.46 million, while China with 80 per cent of the total exports remained the major destination for Nigeria’s solid minerals exports.
From the report, a total of N3.87 billion was recorded in 2020 as social expenditure, representing an increase of 49 per cent over the amount expended for the same purpose in 2019.

Besides, N5.8 million was documented as environmental expenditure by three companies in the year, while information on Community Development Agreements (CDA) was not disclosed.

The report further revealed that out of Nigeria’s total Gross Domestic Product (GDP) of N152.32 trillion in 2020, the solid minerals sector contributed N686.64 billion representing only (0.45 per cent) while the sector’s contribution to the country’s exports during the period was a mere 0.14 per cent.

The report underlined the urgent need for the government to invest aggressively towards the development of the solid minerals sector to maximise its potential for the future of Nigeria’s economy.

Furthermore, 26 recommendations were made, one of which was the need to commence and intensify comprehensive reforms in the solid minerals sector, starting with the establishment of a public-private-state-owned enterprise (SOE) to lead and drive investments in the sector.

This SOE, according to the report, should be similar to the role of the Nigerian National Petroleum Company (NNPC) in the oil and gas industry. NEITI, however strongly advised that any such enterprise should adapt and emulate the Nigeria Liquefied Natural Gas (NLNG) model.

Commenting on the report, the Executive Secretary of NEITI, Dr. Ogbonnaya Orji, stressed that at a time the government was in a desperate search for revenues to finance the widening budget deficits, NEITI was determined to use its reports to disclose potential revenue recoveries that are awaiting immediate action by the relevant government agencies.

“It is of interest to NEITI that every kobo counts to reduce government financial burden, and our reports will continue to provide useful information and data on who owes what in the oil, gas and mining sector.
“This is another impact that our reports will pursue in line with our mandate.” Orji declared.

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