A Review of the Nigerian Energy Industry

Nigeria rakes in N26.9bn from solid minerals in 2011

Gold-miners01 July 2014, Abuja – The Nigeria Extractive Industries Transparency Initiative, NEITI, has announced that the Federal Government earned a total of N26.9 billion from solid minerals in 2011.

The Executive Secretary of NEITI, Mrs. Zainab Ahmed, who disclosed this at the public presentation of 2011 Solid Minerals Industry Audit Report in Abuja, said, out of this amount, a total sum of N26.8 billion represents funds paid by companies.
The said the report also shows that the difference between what the companies paid in taxes, levies, and royalty, and what government actually received into its coffers was N33.1 million.

The key findings of the reports according to her, “showed that Nigeria exported a total of 7,115,088.50 metric tonnes of solid minerals valued at N11.9 billion during the period under review.” However, it noted that a review of the Central Bank of Nigeria, CBN, and the Nigeria Customs Service, NCS, records on exported minerals showed that there were discrepancies in the value of exported minerals as well as the associated companies.

From the report, aggregated revenue received by Federal Government increased significantly in 2011, as compared to previous years. This was attributed to the awareness created from the last audit cycle by NEITI, and the increasing attention paid by government to the solid minerals industry.

The report observed that there is poor synergy between the various government agencies such as Ministry of Mines and Steel Development; CBN; NCS; Nigeria Export Promotion Council, NEPC; and the Mining Cadastral Office in tracking records/revenue on exported solid minerals.

It further noted, “Despite the fact that Gold and Barites were mined across the nation, there were no records of any royalty or similar payments.”

Ahmed added, “As I earlier noted, the conduct and public presentation of this audit is in line with the principles of the global Extractive Industries Transparency Initiative, EITI, which Nigeria signed up to since 2003.

“Under the EITI global principle, all member countries including Nigeria, are required to publish on a regular basis, independent audit reports to acquaint the citizens with current information and data on what extractive companies paid to governments and what government and its agencies received in terms of royalties, taxes, levies, signature bonuses, rents etc.

“In the pursuance of this mandate, our independent audits cover financial, physical and process audits. It seeks to provide reliable information and data on financial flows from companies to government through its agencies to the Federation Account. It also examines the physical and process issues that characterise business activities in the industry with a view to establishing if companies actually paid what they were expected to pay and if government indeed received what it ought to receive.

“The objective of the audit is to establish and make public the revenue flows through investment among the major players in the solid minerals sector, report on the quantities of solid minerals mined, quarried, processed, exported and imported. The audit is also to track solid minerals sector funds collected by the various Government Agencies to the Federation Account and how they were distributed and applied.

“Other objectives include the reconciliation of the payments by the major players (companies/entities) in the solid minerals sector in Nigeria and Government receipt of revenues during the period 2011 in the areas of Royalty, Ground Rents/Annual Surface Rents, Taxation, Levies etc. The Audit is also useful for purposes of planning and economic development of the country.

“In this particular audit, a total number of 87 companies participated in the audit based on the materiality level of N1 million and above defined by NEITI. These companies covered by the audit include construction, manufacturing, artisanal mining and mineral buying centers.

“I wish to state that information and data contained in this are based on information and data mandatorily provided to NEITl’s independent auditors by both relevant government agencies and companies doing business in the solid minerals sector for the period under review.

“It is important to note that all the companies and government agencies covered by the audit were not only actively involved at every stage of the audit process, but signed-off on information and data contained in the report.

“The report therefore contains dependable information and data, outlined salient observations, insightful findings,” she noted.

– Vanguard

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