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Latest independent audit report of the Nigeria Extractive Industries Transparency Initiative (NEITI), released recently has indicated that since the coming in the current administration, earnings from Solid Minerals have continued on a steady rise.
The report indicated that while the mineral production reduced, government’s revenues have been going up.
Business Hilights recalls that previous audit reports of NElTl on the sector had recommended an upward review of Nigeria’s royalty rates to align with the current industry realities.
According to the report, Nigeria earned N69.2bn from solid minerals in 2015, representing an increase of 24 per cent on the N55.8bn generated from the sector in 2014.
NEITI also noted that the total production of solid minerals in the country stood at 39.27 million tonnes in 2015, representing a reduction of 17 per cent from the 47.1 million tonnes produced a year earlier.
Cement manufacturing companies were the major revenue contributors to the sector, accounting for over 60 per cent; while construction companies and real mining companies contributed about 31 per cent and eight per cent, respectively.
The report stated that three states, Ogun, Kogi and Cross River, and the Federal Capital Territory accounted for about 70 per cent of the production volumes in 2015, with Ogun State topping the table with 36 per cent.
While noting that the observed drop in the 2015 production figure was linked to insecurity in parts of the country and more stringent approval process for explosives used in mining.
“This increase in revenue was due to the growth in taxes collected from the sector and review of royalty rates paid by companies, which came into effect within the year under review,” the report stated.
NEITI report disclosed that the value of solid minerals’ exports in 2015 stood at $9.733m, which was 1.45 per cent of the non-oil exports for the year.
Lead and zinc topped the chart with 79 per cent, valued at $7.7m; while 175 ounces of gold, valued at only $122,000, were exported during the period.
Earnings from solid minerals sector contributed 0.12 per cent to the country’s Gross Domestic Product in 2015, a marginal increase of 0.01 per cent on the 0.11 per cent contributed by the sector in 2014.
The Executive Secretary, NEITI, Waziri Adio, was of the opinion that “This report shows evidence that the contribution of the solid minerals sector to government revenues and macro-economic indicators is beginning to improve, even if marginally”.
Apart from cement where much of the revenues come from, the report highlighted other contributions by companies and states to the sector’s revenue growth and development.
A total of 4,305 mineral titles were valid in 2015. Of this figure, 204 titles were mining leases; 657 were for small-scale mining; 1,865 for quarrying licences, while exploration licences accounted for the remaining 1,579.
Whereas the audit report recognised the progress being made so far by the government towards repositioning the sector to be a major driver of the economic and revenue diversification agenda of the present administration, NEITI averred that to sustain this growth and further enhance the capacity of the sector to contribute to the economy, the report called for the speedy release of the N30bn Solid Minerals Development Fund recently approved by the Federal Executive Council to the intended beneficiaries in order to boost activities and performance.