Recently, the Federal Government disclosed plans to audit the solid minerals sector and its counterpart, the oil sector. Ruth Tene looks at the purpose of the audit and reactions from industry players
Chairman, Malali Quarry workers Union, Kaduna State, Kabiru Mohammed , after receiving a grant from the Sustainable Management of Mineral Resource Project (SMMRP) said life had become easier for members of the union as a result of the grant.
He said, “We benefitted much from the grant which was used to purchase a crusher and power generating set and these are making work easier because with the machine, we can crush double or thrice what we could do manually.”
So this and many more would be the expected results of the Nigeria Extractive Industries Transparency Initiative (NEITI) audit in the sector, to enhance production in the minerals sector as well as to ensure that government gets what is due to it without being short-changed.
The solid minerals sector, considered an alternative to crude oil and also part of the present government’s transformation agenda, is as rich as it is deprived due to the many illegalities and challenges existing in the sector.
It is rich because every state in Nigeria has one or more mineral resources, this makes the sector a promising one if governments, both at the state and federal levels would harness the abounding opportunities. But this remains a tall dream as government continues to ignore the existing opportunities in the sector.
The sector is also poor because there is a near absence of government and private investments thus resulting in the active occupation of artisanal and informal miners and have deprived government of large source of revenue while denying a good number of unemployed youths gainful employment, as most people chose to use family members or opted for cheap and illegal labour such as children.
The near absence of government participation and its choice to play only regulatory roles rather than participatory and investing, is what has led to the present audit by the NEITI .
The NEITI audit would compel mining firms and all players in the solid minerals sector to declare payments made to government in line with laid down requirements so as to ensure that communities rich in solid minerals and the federal government are not short-changed as has been the case in the past where miners under-declare their resources and under-pay on their royalties.
It is hoped that at the end of the audit the sector would not only boast of better revenue but better investors and investments than presently observed, while at the same time ensuring the protection of the environment as well as creation of better employment opportunities for indigenes of the various communities which are blessed with natural minerals.
Severally it has been claimed that if the opportunities in the sector are properly harnessed it is capable of creating large scale employment irrespective of qualifications across all states of the federation as well as generate revenue for government as much as oil is generating and even beyond that as was the case before oil was found in Nigeria.
Speaking on the development, the Minister of Mines and Steel Development, Arch. Mohammed Musa Sada, posited that the idea behind the audit was part of government’s effort to ensure transparency, confirm revenue from the sector while ensuring that communities and government were not short-changed by prospectors in the sector.
Sada who spoke exclusively to LEADERSHIP said, “The audit in the oil and gas sector is different from that of the solid minerals sector in that there are different types of incomes for both sectors.”
He said that while government had shares in the oil sector, it has none in the solid mineral sector except royalties paid by prospectors in the sector and therefore there was nothing to be worried about as it was for the good of the sector.
The Technical Assistant (Mines), Ministry of Mines and Steel Development, Mr Umar Hassan assured that the need to have the audit could not be underestimated as the ministry lacked the capacity to investigate and access correct payment data due to poor financing of the sector, lack of proper vehicles to visit mine sites as well as inadequate manpower to cover mining activities in the country.
He maintained that the audit was not to witch-haunt anybody , but was for the benefit of the sector and the nation at large.
Also speaking with LEADERSHIP, Director-General of the Mining Cadastre Office, Mr Mohammed Amate assured that there was nothing to worry about as NEITI was only auditing to ensure that proper revenues are collected and paid into the Federation Account.
He said the Cadastre office had nothing to fear as the office does not deal with cash because most of its activities are handled online while only the processing and annual service charge fees were paid through the Mining cadastre office. He said the bulk of revenue from the sector was from royalties on minerals produced, which were not in the purview of the Cadastre office.
Meanwhile, the National President, Association of Dimension Stone Operators, Kabir Hamayaji Umar, has said that operators in the sector pay their taxes as at when due.
He said, “In terms of taxes we pay, in a nutshell there are taxes that accrue through VAT, there is the corperation tax at the end of the year and also personal income tax of our employees and we pay all.”
Asked what the estimate of their taxes amount to yearly, Umar said, “We cannot say how much we remit for the VAT every month, it is about N150,000 to N200,000 I am not sure, while our cooperation tax is in the region of N3 to N5 million. It was higher in the past, but we are presently enjoying our pioneer status, we have invested in two processing plants, one here, one in Abuja and because of that, all our investments are being used to reduce our tax liability.”
Recall that NEITI Director of Communications,Orji Ogbonnaya Orji while in London had announced the commencement of the audit which he described as critical to the anti-corruption war in Nigeria. He said, “The audits are part of efforts to sanitise the sector, enthrone corporate governance and good business ethics required to build foreign direct investors’ confidence in the industry.”
He assured that the project would bring NEITI Industry Audits up to date and put NEITI in a good standing in responding promptly with information and data to several queries.