Despite Vast Deposits, Nigeria Earned Mere N193.59bn From Solid Minerals Sector In 2021

executive secretary of NEITI, Dr Orji Ogbonnaya Orji and other stakeholders during the launch of the 2021 solid minerals report in Abuja on monday

By Juliet Ukanwosu

Despite the abundant mineral resources spread across the country, Nigeria earned an abysmal N193.59billion from the solid minerals sector in 2021, the Nigeria Extractive Industries Transparency Initiative (NEITI) solid minerals industry report has shown.

The report also identified a total sum of N1.06billion as outstanding company liability to government within the period under review, due to the failure of some of the companies to pay their annual service fees for the respective mineral titles.

The report which was unveiled in Abuja on Monday, revealed that this is the highest earnings from the sector since NEITI commenced audit of the sector, with an increase of N60.32 billion or 51.89% growth, when compared to the 2020 revenue flows of N116.82 billion

“This contribution, though a significant increase over past years, is still abysmal considering the potentials of the sector to the Nigerian economy,” the report noted.

Executive Secretary of NEITI, Dr. Orji Ogbonnaya Orji who presented the report stated that it covered actual payments by 1,214 companies operating in the sector and receipts by three government agencies. The report also covered balances payable/receivable from financial inflows, tracked the funds and utilisation meant for the development of solid minerals in Nigeria, such as 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).

On production, the report disclosed that the total volume in 2021 was 76.28 million tons with a royalty payment of N3.57billion. 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, while BUA, Lafarge and Zeberced accounted for 8.4, 4.3 and 3.3 million tons respectively.

On states contribution, Ogun state recorded the highest production 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.

Further analysis showed that a total of 2,045 licenses were issued with exploration licenses accounting for 840 (increase of 62.79%), Small Scale Mining Lease (SSML) 771, Quarry Lease 255, Reconnaissance Permit 139 and Mining leases 40.

The solid minerals contribution to export value in 2021 was a mere 0.24%. The total minerals exported 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.

L-R: Juliet Ukanwosu, Editor, Extractive360; Vivian Idepefo, Member Women in Extractives; Faith Nwadishi, Executive Director, Centre for Transparency Advocacy; Emily Offodile, Executive Director, Ziva Community Initiative; Obiageli Onuorah, Head, Communications & Stakeholders Management, NEITI and Chinenye Okechukwu, Team Leader, Solid Minerals, NEITI during the launch of the NEITI 2021 solid minerals sector audit in Abuja 

A further breakdown of the revenues shows that the Federal Inland Revenue Service (FIRS) collected bulk of the revenue of N169.52billion, the Mining Cadastre Office generated N4.3billion while the Mining Inspectorate Department generated a total of N3.62billion.

The report, which is the 12th on the sector, also observed a consistent year-on-year increase in revenue to the federation account in the past 15 years (2007-2021), putting the total accrued revenue to N818.04billion.

However, it noted that this is significantly low compared to the economic potential of the sector, revealing that of the N6.62 trillion total government revenue in 2021, the solid minerals sector barely contributed 2.6%, with only 0.63% contribution to GDP.

“While there has been some improvement compared to previous years where it contributed 0.45% in 2020 and 0.26% in 2019, the sector has not yet reached its full potential in making a significant impact on the overall Nigerian economy.” the report highlighted.

Extractive360 reports that China was identified as the principal destination of Nigeria’s mineral exports, accounting for 97% and 88% of the export volume and value, while other destinations include Malaysia, Korea, Thailand and UAE.

In his address, Speaker, House or Representatives, Rt. Hon. Tajudeen Abbas, Ph.D, while commending NEITI, assured that the 10th House of Representatives will do everything within its powers to equip NEITI with stronger statutory powers, through legislative amendments on the NEITI Act to enable the agency carry out its task of ensuring transparency and accountability in the extractive industry.

“The House of Representatives will also play its part in ensuring the implementation of NEITI’s Report, in line with the relevant provisions of 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. Working together, we will ensure the realization of government’s desire for diversification of the economy for the attainment of alternative source(s) of revenue and clean energy, that will bring about the realization of the $8trillion revenue for Nigeria in the next eight years” he said.

Also speaking at the event, the Secretary to the Government of the Federation, Sen. George Akume, while urging NEITI to consolidate its achievements by expanding operations to all the zones and states across the country to help bring impactful activities to host communities and citizens at the grassroots, he called on extractives companies “to note that submission to the NEITI process is statutory and mandatory and therefore full and timely compliance with Nigeria EITI process must be taken very seriously.”

He further assured that the Federal Government will carefully study the report and adopt it as a valuable working document for the government’s overall reform programme for the solid minerals sector.

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