Mining sector generated N128.27bn in 2020, as operators owe N2.76bn to federation accounts – NEITI


Nigeria Extractive Industries Transparency Initiative (NEITI) has said that over 2,000 companies operating in the country’s solid minerals sector owe a combined total of N2.76 billion to the Federation Accounts.

Dr Orji Ogbonnaya Orji, Executive Secretary, NEITI

NEITI disclosed this in a statement signed by its Deputy Director/Head, Communications and Advocacy, Mrs Obiageli Onuorah, Sunday, while announcing the release of the 2020 Independent Solid Minerals Industry Report.

The NEITI Independent Solid Minerals Industry Report tracked and reconciled financial flows in the sector, checked quantities of minerals produced, utilised and exported in 2020.

Presenting the Report before its multi-stakeholders, NEITI’s Executive Secretary, Dr Orji Ogbonnaya Orji, said the companies’ liabilities resulted from failure on the part of 2,119 companies to pay statutory annual service fees for respective mineral titles.

Orji said that 6,010 existing solid mineral titles were valid as of December 31, 2020, while 7,605 mining titles were issued in the industry in the past five years.

“At this time that government is desperate for revenues to finance the widening budget deficits, NEITI is determined to use its reports to disclose potential revenue recoveries, awaiting immediate action by relevant government agencies.

“It is of interest to NEITI that every kobo counts to reduce government financial burden, and our reports will continue to provide useful information and data on who owes what in the oil, gas and mining sector,” Orji declared.

He announced that the total revenue contributions from the sector in 2020 rose to N128.27 billion, an increase of over 54 per cent from the N74.85 billion recorded in 2019 in spite of COVID-9 pandemic.

Orji said the report also revealed that N8.89 billion was shared to the federating units as solid minerals revenue in 2020.

“Breakdown of the figure shows that Federal Government received N4.07 billion (45.83 per cent), States and LGAs received N2.07 billion and N1.59 billion (23.25 per cent; 17.92 per cent) respectively while N1.16 billion (13 per cent) was recorded as derivation share.

The executive secretary disclosed that 71.1 million metric tons of minerals were produced in 2020.

According to him, a breakdown of the total production showed that granite, limestone, sand and laterite were the highest contributors to minerals royalty payments recorded within the period.

He further disclosed that five states of the federation: Ogun, Kogi, Cross River, Edo and Bayelsa topped the table, contributing 66 per cent of solid minerals produced in the country that year.

On companies’ activities that shaped business investments in the solid minerals sector, he identified Dangote Cement Plc. as the first, followed by Lafarge Plc, BUA International and Dantata and Sawoe with the highest production.

This, he said, accounted for about 64 per cent of the total mineral production volume in 2020.

He further disclosed that total minerals export in 2020 was 32.99 million tons valued at 42.46 million dollars while China with 80 per cent of the total export remained the major destination for Nigeria’s solid minerals exports.

“From the report, a total of N3.87 billion was recorded in 2020 as social expenditure, representing an increase of 49 per cent over the amount expended for the same purpose in 2019.

“Besides, N5.8 million was documented as environmental expenditure by three companies in the year, while information on Community Development Agreements was not disclosed,” he noted.

Orji said the report revealed that out of Nigeria’s total Gross Domestic Product (GDP) of N152.32 trillion in 2020, the solid minerals sector contributed N686.64 billion representing only 0.45 per cent.

Chairman, NEITI National Stakeholders Working Group, Mr Olusegun Adekunle, explained that the report was conducted under its oversight and approved in line with the Extractive Industries Transparency Initiative (EITI) Standard and in consonance with NEITI Act 2007.

Adekunle urged the civil society, the companies, government and the citizens to use the information and data in the report as tools to advance public discourse on developing the solid minerals sector to create jobs and reduce poverty.

The NEITI Report underlined the urgency for the government to invest aggressive energy, time, interest and resources towards the development of the solid minerals sector to maximise its potential for the future of Nigeria’s economy.

It underlined as a priority, the restoration and establishment of a public-private-state-owned enterprise (SOE) to lead and drive investments in the sector.