NEITI ES
Waziri Adio
NEITI ES
Waziri Adio
Solid Minerals Contributed N43.2Bn Govt Revenue in
2016-NEITI
Abuja, November 13, 2018. The solid minerals sector contributed a
total sum of N43.22billion to government coffers in 2016, reports
the Nigeria Extractive Industries Transparency Initiative
(NEITI).
A breakdown of the figure shows that taxes collected by the Federal
Inland Revenue Service (FIRS) accounted for N40.38 billion or
93.43%, while fees collected by the Mining Cadastral Office stood
at N1.15 billion or 2.66%.
The Mining Inspectorate Department (MID) recorded N1.64 billion
as royalty payments, an increase of 30.15% over the N1.27 billion
reported as royalty payments in 2015.
These are some of the highlights of the 2016 audit report of the
solid minerals sector released today by NEITI.
The audit 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.
From the report, total minerals production for 2016 was 41.87
million tons valued at N34.09 billion, representing 33% increase on
the N25.56 billion reported in 2015.
However, tax collection and payment of other fees for 2016
reduced by 32% when compared to the figure of N63.98 billion for
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% of the total
royalties paid.
On state-by-state minerals production, Ogun State contributed
33.49% to the total production to top the table, followed by Kogi
State with a contribution of 19.7%, while FCT came third with
6.20%.
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% 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% of
the total solid minerals production in 2016, followed by granite
with 31.32%. The least contributions were made by gypsum, iron,
talc and amethyst with 0.1% each.
The report also revealed that the solid minerals sector’s
contribution to exports in 2016 stood at ₦11.16 billion,
representing 3.38% of the N330.01 billion for non-oil exports and
0.13% 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%, followed by Spain
and India which accounted for 26.48% and 8.90% 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 % of the total GDP of N67.9
trillion.
The sector has witnessed a steady, even if marginal increase in
its contribution to the GDP from 0.11% in 2014, 0.12% in 2015 to
0.13% in 2016. The sector also contributed 0.3% to national
employment in 2016.
The report 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.
The 2016 Solid minerals audit was conducted for NEITI by Tajudeen
Badejo & Co, an indigenous accounting and auditing firm.
The independent audit is consistent with NEITI’s mandate and in
fulfillment of Nigeria’s obligation to the global Extractive
Industries Transparency Initiative (EITI) as an implementing
country.
The NEITI 2016 oil and gas report is currently at the final stage
of completion and will be released soon, while the 2017 audit
process is ongoing.
Details of the 2016 solid minerals report with findings and
recommendations are available on NEITI website
www.neiti.gov.ng.
Dr. Orji Ogbonnaya Orji.
Director, Communications and Advocacy