FG generated N818bn from solid minerals in 15 years

By Onome Amuge.

Nigeria’s solid mineral sector has in the past 15 years, contributed a consistent year-on-year increase in revenue to the federation account as the federal government generated N818.04 billion from the sector between 2007 and 2021, according to a new report by the Nigeria Extractive Industries Transparency Initiative (NEITI).

NEITI, in its latest 2021 industry report of the solid minerals sector, which was unveiled to stakeholders and lawmakers in Abuja, also disclosed that the total revenue generated by the solid minerals sector in 2021 stood at N193.59 billion representing an increase of N60.32 billion or 51.89 per cent from the N116.81 billion generated in the previous year of 2020.

Presenting the report,Ogbonnaya Orji, the executive secretary, NEITI, said the 2021 solid minerals report reviewed, ascertained, reconciled and reported all revenues and investment flows to and from government in the solid minerals sector.

Orji disclosed that the report,which is NEITI’s 12th,covered factual payments made by 1,214 companies covered by the exercise in the sector and receipts by three key government agencies including the Federal Inland Revenue Service (FIRS), the Mining Cadastre Office and the Mining Inspectorate Department of the Ministry of Mines and Steel Development.

He said the NEITI report also covered balances payable/receivable from financial inflows and tracked the funds and utilisation meant for the development of solid minerals in Nigeria.

A breakdown of the revenues indicated that the FIRS collected bulk of the revenue of N169.52 billion, the Mining Cadastre Office raked in N4.3 billion,while the Mining Inspectorate Department generated a total of N3.62 billion.

“This positive trend reflects a continuation of the upward positive trajectory observed in the sector over the past five years,” Orji said.

However, the  report pointed out that the contribution, though a significant increase over past years, is still abysmal considering the potentials of the sector to the Nigerian economy.

According to the report, the solid minerals sector barely contributed 2.6 per cent to the N6.62 trillion total government revenue in 2021.

On Production, the report disclosed that total volume of solid minerals used or sold in 2021 was 76.28 million tonnes with a royalty payment of N3.57 billion.

The minerals with the largest production volume in the year under review include granite, limestone, laterite, clay and sand.

According to the NEITI report, Dangote Plc accounted for the highest production in the year under review with a total production of 28.8 million tonnes. Bua and Lafarge accounted for 8.4 and 4.3 million tonnes, respectively, while Zeberced accounted for 3.3 million tonnes.

In terms of production by states, Ogun state recorded the highest production in 2021, with a total of 17.5 million tonnes followed by Kogi state with 16.3 million tonnes and Edo with eight million tonnes. Meanwhile, Borno State recorded the lowest production volume with 25,500 tonnes.

NEITI also noted that there were increases in the number of licenses issued within the period as a total of 2,045 licenses were issued with exploration licenses accounting for 840,up 62.79 per cent. On the other hand, the number of small scale mining lease (SSML) stood at 771, while the number of quarry lease, reconnaissance permit, and mining leases, stood at 255,139, 40, respectively.

The total minerals exported in 2021 was 142.54 million tonnes with a Free on Board (FOB) value of $101.29 million, representing an increase of 138.57 per cent from the $42.46 million reported in 2020 report. Of this, the solid minerals contribution to export value in 2021 was a mere 0.24 per cent, NEITI said.

The First Patriot Nigeria Limited based in Ebonyi state accounted for 44.26 per cent of the total export value. China was identified as the principal destination of Nigeria’s mineral exports, accounting for 97 per cent and 88 per cent of the export volume and value.

Other destinations for Nigeria’s minerals include Malaysia, Korea, Thailand UAE etc in that order.

On solid minerals contribution to the economy, NEITI disclosed that the solid minerals sector contributed 0.63 per cent  to the gross domestic product (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 explained that solid minerals export facilitates international trade and stimulates domestic economic activities by creating employment, enhancing production and increasing revenue generation and so should be encouraged.

Orji, therefore, appealed to state and non-state actors to take seriously the contents of the NEITI reports and play their expected roles in the EITI/NEITI process.