...Says Coys Owe Govt N1.06bn
The Nigeria Extractive Industries Transparency Initiative (NEITI) has said that Nigeria earned a total sum of N193.59 billion from the solid minerals sector in 2021.
NEITI’s Executive Secretary, Dr. Orji Ogbonnaya Orji disclosed this during the unveiling of the 2021 audit report on the Nigerian solid minerals sector on Monday in Abuja.
Dr. Orji noted that N193.59 billion was the earnings from the sector since NEITI commenced the reconciliation of payments by companies and receipts by the government in the sector.
The figure shows an increase of ₦60.32 billion or 51.89% growth when compared to the 2020 revenue flows of ₦116.82 billion. This positive trend reflects a continuation of the upward positive trajectory observed in the sector over the past five years.
This contribution, though a significant increase over past years, is still abysmal considering the potential of the sector to the Nigerian economy.
This information and more are contained in the latest industry report of the solid minerals sector released by the Nigeria Extractive Industries Transparency Initiative (NEITI).
Presenting the report in Abuja, Executive Secretary of NEITI, Dr. Orji Ogbonnaya Orji stated that the 2021 Solid Minerals report reviewed, ascertained, reconciled, and reported all revenues and investment flows to and from the Government in the solid minerals sector.
According to Dr. Orji, “The report which is NEITI’s 12th, covered actual payments by 1,214 companies operating in the sector and receipts by three government agencies, the quantities of minerals that they produced, utilized and exported from the sector, reconciled the physical/financial transactions and undertook special verification on some processes”.
The NEITI report also covered balances payable/receivable from financial inflows, tracked the funds and utilisation meant for the development of solid minerals in Nigeria. The funds covered in the report include the Natural Resources Development Fund, Solid Minerals Development Fund (SMDF), Ministry of Mines and Steel Development’s (MMSD) MinDiver Programme and Solid Minerals Development Funds under the Small and Medium Industries Equity Investment Scheme (SMIEIS) operated through the Bank of Industry- BOI, the emerging issues of beneficial ownership and contract transparency and finally made observations and copious recommendations that would inform policy decisions and implementation.
Dr. Orji further gave a breakdown of the revenues which shows that the Federal Inland Revenue Service -FIRS collected the bulk of the revenue of N169.52Billion, the Mining Cadastre Office generated N4.3Billion while the Mining Inspectorate Department generated a total of N3.62 Billion.
The report also observed a consistent year-on-year increase in revenue to the federation account from the solid minerals sector in the past fifteen years (2007-2021). It puts the total revenue that accrued to the government during these years to N818.04bn, which the report pointed out, is significantly low compared to the economic potential of the sector, noting that of the N6.62 Trillion total government revenue in 2021, the solid minerals sector barely contributed 2.6%.
On Production, the solid minerals report disclosed that 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 minerals with the largest production volume in the year under review are 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. Bua and Lafarge accounted for 8.4 and 4.3 million tons while Zeberced accounted for 3.3 million tons respectively.
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 lowest 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 (an increase of 62.79%), 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% from the $42.46 million reported in 2020 report, the report stated.
However, the solid minerals contribution to export value in 2021 was a mere 0.24%. The First Patriot Nigeria Limited based in Ebonyi state accounted for 44.26% of the total export value. China was identified as the principal destination of Nigeria’s mineral exports, accounting for 97% and 88% of the export volume and value. Other destinations for Nigeria’s minerals include Malaysia, Korea, Thailand UAE, etc in that order.
Dr. Orji explained that the EITI Standard which guides implementation in Nigeria requires a Multi Stakeholders Group (MSG) to provide strategic policy direction and leadership. Unfortunately, the National Stakeholders Working Group (NSWG) was among the Boards of MDAs dissolved on June 19, 2023.
The NSWG is a mandatory requirement for any country’s membership of the 57-member international organisation. NEITI hereby renews its appeal to the government to put the NSWG in place in other to fix the gap in its operations due to the peculiar nature of the agency.
On Emerging Issues, the report recommended that the federal government should collaborate with relevant stakeholders to ensure that the Energy Transition Plan (ETP) is consciously implemented with the Energy Transition Minerals such as Cobalt, Lithium, Nickel, Copper, Graphite, and Titanium beneficiated to increase revenue to government coffers and create employment opportunities for the teeming youths.
On the use of the report, NEITI reaffirmed that when information and data on revenue from extractive sectors are publicly available and accessible, the citizens, civil society groups, and media have the responsibility to ask questions about the management of Nigeria’s natural resources to address the country’s socio-economic problems and poverty reduction.
Dr. Orji used the opportunity to appeal to state and non-state actors to take seriously the contents of the NEITI reports and play their expected roles in the EITI/NEITI process.
According to him “The civil society and media play very important roles in the EITI process, particularly, in the areas of dissemination, campaigns, and advocacy on the implementation of the recommendations contained in the report and support the translation of the contents of the NEITI reports to visible impacts in the lives of all Nigerians.
The Report was by Amedu Onekpe and Co Chartered Accountants, an indigenous firm, and is expected to guide policymakers in making quality decisions in the ongoing reforms in the sector.
NEITI says it has simplified the report, printed copies, and circulating free of charge.
Unveiling the audit report, the Secretary to the Government of the Federation, Senator George Akume said, that President Bola Ahmed Tinubu’s Administration was fully committed to the fight against corruption in the extractive industry in particular and in the other sectors of the economy.
He said, “as an administration, we are convinced that the revival of our economy and the 8-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”.
Represented by Dr. Maurice Mbaeri, he assured that the Federal Government would carefully study the report and adopt it as a valuable working document for the government’s overall reform programme for the solid minerals sector.
Earlier in his Goodwill Message, the Speaker of the House of Representatives, Rt. Hon. Tajudeen Abbas said the 10th House of Representatives would do everything within its powers to equip NEITI with stronger statutory powers, through legislative amendments on the NEITI Act geared towards enabling NEITI to carry out its task of ensuring transparency and accountability in the extractive industry.
Represented by Hon. Awaji-Inombek Dagomie Abiante, he said, the House of Representatives would also play its part in ensuring the implementation of NEITI’s Report, in line with the relevant provisions of the NEITI Act.
“The House will ensure that the Report is laid on the floor of the House and debated extensively to ensure the implementation of the recommendations made therein”, the Speaker added.