NEITI Laments Solid Minerals Sector Poor Contributions, Tasks Senate On Reforms
By Juliet Ukanwosu
The Nigeria Extractive Industries Transparency Initiative (NEITI) has lamented the abysmal performance of the solid minerals sector contributions to the economy, saying it does not mirror the vast mineral deposits in Nigeria and the potentials that the sector holds for the economy.
Executive Secretary of NEITI, Dr. Orji Ogbonnaya Orji, who reiterated this position while interacting with the Senate Committee on Public Accounts on NEITI’s industry reports for the oil, gas and mining sectors covering years 2021, 2022 and 2023, renewed calls for the urgent and comprehensive reform of the solid minerals sector.
Dr. Orji remarked that the solid minerals industry contribution of less than one percent to the GDP needs urgent help, intervention and progressive legislation that would attract investors.
“NEITI works with the ministry and we know what the challenges are, they also need support. The data we presented reflects the current situation and activities in the sector, but that is not in any way near the potential of the sector,” Dr. Orji told the Senate Committee.
He added that the information and data provided by NEITI is put in the public domain with the expectation that policy makers and the legislature will use the information to initiate the comprehensive reforms needed in the sector.
On the oil and gas industry reports, Dr. Orji pointed out that a significant progress recorded in the oil and gas sector in 2023, is the significant drop in crude oil losses by 78%; declining from 36.6 million barrels’ loss of crude in 2022 to 7.68 million barrels’ loss in 2023.
According to Orji, another positive indicator in the oil and gas report is the fall in fuel importation figures which dropped by 3.5billion litres, from 23.54 billion litres recorded in 2022 to 20.28billion litres in 2023.
However, the report revealed a decline in revenues from the sector by 13.7% between 2022 and 2023. “The oil and gas sector recorded a total revenue of $35.78 billion in 2022, but dropped to $30.86 billion in 2023. The report also showed that Nigeria earned a total of $831.14 billion between 1999 – 2023 (25yrs)”, Dr. Orji stated.
Furthermore, the NEITI reports also showed that the sector’s contribution to Nigeria’s GDP consistently declined for the three years under review. It presented the figures of 7.24% for 2021, 5.74% for 2022 and 5.48% for 2023 respectively.
Similarly, gas production also declined during the period from 2.47billion scf in 2021, to 2.52billion scf in 2022 and lower to 2.49billion scf in 2023. To which end, Dr. Orji called for clear alignment between Nigeria’s gas commercialisation and energy transition policies and the Climate Change Act to accelerate the country’s journey to affordable, clean and renewable energy.
The NEITI report also revealed a total sum of $6.1 billion as outstanding liabilities owned by the oil and gas industry to the Federation as at August 2024.
Dr. Orji explained that these are made up of outstanding royalties, taxes, rents and other collectible revenues due to be collected into government coffers. “At a time when the country is mobilising resources to meet its budget expenditures, recovering these revenues by the relevant agencies will be a huge relief to the government”, he stated.
In his reaction, Chairman of the Senate Committee on Public Accounts, Senator Aliyu Wadada stated that the Committee will hold a public hearing driven by the NEITI industry reports, emphasising that all companies with outstanding liabilities to the federal government must appear during the proposed hearing.
The Senator lamented the poor performance and contribution of the solid minerals sector to the economy especially with the recorded remittances which does not reflect the potentials of the sector, adding, “This is quite ridiculous and unacceptable. It cannot continue. Nigeria needs a profitable solid minerals sector.”
Responding to a question by Sen. Osita Izunaso (Imo West) on whether NEITI was comfortable with the implementation of the PIA, Dr. Orji pointed out that NEITI’s concern is that the PIA was being implemented without a coordinated plan or a strategy.
Orji recalled that an implementation plan was set up immediately the PIA was enacted and that Committee – the Petroleum Industry Act Steering Committee (PIASTEERCO)- did not conclude its assignment and did not submit any report, therefore, making it impossible for the new administration to have a plan to work on.
The Executive Secretary called for a revisit and the constitution of a new team comprising multi stakeholder group to develop a strategic plan to guide the implementation of the PIA because of the importance of the law.
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