The Nigeria Extractive Industries Transparency Initiative (NEITI) yesterday said the solid minerals sector contributed a total sum of N43.22 billion to government coffers in 2016 in terms of earnings from taxes and payment of other fees.
NEITI disclosed that the amount however indicated a short fall of N22.76 billion representing 32 per cent reduction when compared to the figure of N63.98 billion for 2015.
According to NEITI’s 2016 audit report on the Nigeria solid minerals sector released yesterday, the Federal Inland Revenue Service (FIRS) collected taxes totaling N40.38 billion while fees collected by the Mining Cadastral Office stood at N1.15 billion representing 93.43 and 2.66 per cent contributions to government earnings from the sector.
Similarly, the Mining Inspectorate Department (MID) recorded N1.64 billion as royalty payments, an increase of 30.15 per cent over the N1.27 billion reported as royalty payments in 2015.
According to NEITI director, Communications and Advocacy, Dr. Orji Ogbonnaya Orji, the audit report is conducted under the EITI principles and standard reconciled payments made by mining companies in terms of taxes, royalty and rents against receipts of such payments by relevant government agencies.
The report, revealing that the total minerals production for 2016 was 41.87 million tons valued at N34.09 billion, representing 33 per cent increase on the N25.56 billion reported in 2015.
The report further disclosed that while six hundred and fifty-one (651) extractive companies made royalty payments in 2016, only fifty six (56) companies that met the materiality threshold of N3million and above were considered for reconciliation. The companies that met this threshold accounted for 86.87 per cent of the total royalties paid.
On state-by-state minerals production, Ogun State contributed 33.49 per cent to the total production to top the table, followed by Kogi State with a contribution of 19.7 per cent while FCT came third with 6.20 per cent.
From the report, minerals production by companies shows that three companies – Dangote Cement Plc, West African Portland Cement Plc, and United Cement Company of Nigeria Limited (UNICEM) contributed 70 per cent of total production in 2016. This shows that the cement sub-sector is still dominant in solid minerals production activities.
Further analysis of production by minerals types shows that limestone was the most produced mineral and accounted for 49.35 per cent of the total solid minerals production in 2016, followed by granite with 31.32 per cent. The least contributions were made by gypsum, iron, talc and amethyst with 0.1 per cent each.
The report also revealed that the solid minerals sector’s contribution to exports in 2016 stood at ₦11.16 billion, representing 3.38 per cent of the N330.01 billion for non-oil exports and 0.13 per cent of total export of ₦8.53trillion.
From the report, China was a major destination of Nigeria’s solid minerals in 2016, accounting for 53.63 per cent, followed by Spain and India which accounted for 26.48 per cent and 8.90 per cent respectively.
The report put the Free on Board (FOB) value of the solid minerals exported in 2016 at $40.934 million while the overall contribution of the sector to the country’s GDP was put at ₦87.61billion representing 0.13 per cent of the total GDP of N67.9 trillion.
NEITI also emphasised that the sector has witnessed a steady, even if marginal increase in its contribution to the GDP from 0.11 per cent in 2014, 0.12 per cent in 2015 to 0.13 per cent in 2016. The sector also contributed 0.3 per cent to national employment in 2016.
It also disclosed that a total of 4,575 valid minerals titles spread across the various states of the federation were recorded in 2016. This comprises 1,751 Exploration Licenses, 208 Mining Leases, 1,563 Quarry Leases, and 1,053 Small Scale Mining Leases.
Out of the total valid titles in the MCO register, 1,465 titles were issued in 2016 while 1,030 were revoked and 14 were transferred. The report further stated that 315 Exploration Licenses were issued in respect of the priority minerals identified by government. The priority minerals are gold, lead-zinc, baryte, iron-ore, bitumen, limestone, and coal.
The report revealed that some title holders entered into MOUs with other companies without duly informing the relevant government agencies. As a result, out of the 651 operators that paid royalties, 312 companies representing 48% were not recorded in the MCO register either as valid, revoked or transferred titles for the year.
A striking feature of the report was that the sum of ₦9.923 billion was shared by the three tiers of government in 2016, being the accumulated revenues from 2007 to 2014 from the solid minerals sector.
A breakdown of the figure shows that the Federal Government got N4.547 billion while states and local governments shared N2.306 billion and N1.778 billion respectively. The sum of N1.289 billion was also shared as derivation.
Further breakdown shows that Ogun State received the highest share of N369.84 million while Kogi and Cross River states received N317.66 million and N237.10 million respectively.
Other states among the top five recipients are Kano and Oyo states which received N208.83 million and 200.45 million respectively while Ekiti and Bayelsa got the lowest share of N91.25 million and N76.66 respectively.
The release of the 2016 report by NEITI brings to seven in the series of independent reports on the solid minerals sector published as part of efforts to ensure transparency as well as bring local and international attention to the revenues and investment potentials in the solid minerals sector.