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HomeTop NewsNigeria earns N80 bln from solid minerals sector in 2019

Nigeria earns N80 bln from solid minerals sector in 2019

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Nigeria earned N79.96 billion from the solid minerals sector in 2019, according to its 2019 audit report on the sector, released on Sunday, in Abuja.

The Nigeria Extractive Industries Transparency Initiative (NEITI) in its report said that the figure, which represented accruals to the Federation and other subnational entities, showed a 15 percent increase when compared to the N69.47 billion recorded in 2018.

“The 2019 earnings accounted for 16 percent of the total revenues of N496.28 billion that have accrued to the Federation, from the sector, over a period of 13 years (2007 to 2019).

“And it is also the highest since 2007 when NEITI commenced reconciliation of payments in the solid minerals sector,’’ the report said.

A breakdown of the receipts showed that taxes to the Federal Inland Revenue Service (FIRS), on behalf of the federation, accounted for N69.92 billion or 87.4 percent of the total, representing the highest flow to the federation’s coffers.

It revealed that fees and royalties paid to the Mining Cadastre Office (MCO) and Mines Inspectorate Department (MID) accounted for N2.37 billion (3.0 percent) and N2,55billion (3.2 percent), respectively.

Also, revenue accruals to the States stood at N5.1bn, representing a 42 percent increase when compared to the N2.1 billion recorded in 2018.

The NEITI report also disclosed that the outstanding amount of ₦8.887billion, which accrued from the solid minerals sector as of December 31, 2019, was distributed amongst the three tiers of government in May 2020, based on the extant revenue sharing formula.

It noted that the balance as of October 31, 2020, was N3.95 billion.

Giving a breakdown of the distribution, the report showed that the Federal and State governments received N4.07 billion or 45.83 percent and N2.06 billion or 23.25 percent respectively.

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Local governments equally received N1.59 billion or 17.92 percent, while the balance of N1.15 billion was distributed to only solid minerals producing states as their share of the 13 percent derivation.

According to the report, out of 702 companies that paid royalty to the government in 2019, only 74 companies met the materiality threshold of N3 million, which represented a 7.2per cent increase when compared to the 69 entities that met materiality threshold in 2018.

“These 74 companies accounted for 87.63 percent of total royalties of N2.50 billion paid in 2019, with the top 5 companies – Dangote Cement PLC; Lafarge PLC; Dangote Industries; Julius Berger; Reynolds Construction – paying more than 50 percent of total royalties”, the report stated.

The report also disclosed that a total of 1,296 mineral permits were issued by the Mining Cadastre Office (MCO) in 2019, with the Small Scale Mining Leases category recording the highest with 602 permits granted, followed by 501 and 169 for Exploration Licenses and Quarry Leases respectively, while the least figure of 24 permits was recorded by Mining Leases.

The report further put the total volume of minerals produced in 2019 at 59.82 mt, with a five-year trend analysis of minerals produced showing that a total of 224,188,056 metric tonnes were produced during the period, albeit the 2019 total production represented the highest in the five years reviewed.

“The 2019 volumetric figures also represent an increase of 29.41per cent when compared to 46.7mt produced in 2018, closely followed by 43.08mt and 39.27mt produced in 2016 and 2015 respectively, with lowest production figure of 35.32mt recorded in 2017,’’ it noted.

An analysis of revenue flows from the sector in the report also showed that the sum of N79.96 billion recorded in 2019 was the highest in the past five years, followed by N69.47 billion and N69.2billion recorded in 2018 and 2015 respectively. In addition, N52.76 billion was recorded in 2017, while the sector accounted for N41.98 billion in 2016.

On minerals exports, the report showed that the solid minerals sector accounted for N124.23 billion of the total government exports of N24.27 trillion for 2019, representing 0.51 percent of total exports for the year.

As for the sector’s contribution to the economy, NEITI cited data from the National Bureau of Statistics (NBS) which stated that mining and quarrying contributed 0.26 percent to GDP in 2019, a higher figure than the 0.18 percent contribution in 2018.

“Nigeria’s GDP in 2019 was ₦144.21 trillion with contributions from the solid minerals sector totaling ₦368.99 billion, representing 0.2percent of the total amount.

”This shows a steady growth in the sector’s contribution to the economy in the past five years, from a contribution of 0.12% in 2015 to 0.26 percent in 2019,’’ the report added

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