NEITI says billions of naira in revenue missing in solid minerals sector

*Executive Secretary of NEITI, Dr. Orji Ogbonanya Orji.

*Executive Secretary of NEITI, Dr. Orji Ogbonanya Orji.

Oscarline Onwuemenyi

15 December 2015, Sweetcrude, Abuja – The Nigeria Extractive Industries Transparency Initiative, NEITI, has said that the relevant government agencies responsible for the management of Nigeria’s solid minerals sector have not been able to trace the whereabouts of billions of naira in revenue that should accrue to the government from the sector.

The acting Executive Secretary of NEITI, Dr. Orji Ogbonanya Orji said at an anti-corruption forum in Abuja that the poor synergy among government agencies in the sector, had contributed immensely to the situation.

Orji explained that, “The scoping study of the sector conducted by NEITI revealed that there are abundant solid minerals in commercial quantities across all the states of the federation.

“However, the report observed that there is poor synergy between the various government agencies such as the Ministry of Mines and Steel Development, Central Bank of Nigeria (CBN), Nigeria Customs Service (NCS), Nigeria Export Promotion Council (NEPC) and the Mining Cadastral Office (MCO) on tracking and keeping records of revenues on exported solid minerals.”

Orji further noted that, “Despite the fact that gold and barites were mined across the nation, there were no records of any royalty or similar payments made to this effect.”

Insisting on closer checks on the sector’s operations, Orji said: “NEITI therefore calls for a check on the incessant smuggling of solid minerals products out of the country through deliberate creation of boarder markets at strategic boarder points across the country.”

“The activities of foreign nationals operating in the solid minerals sector should also be regulated in line with best practices in the industry.”

NEITI had in its maiden report of activities in the solid minerals sector from 2007 to 2010, showed that over 70 per cent of mining title holders in Nigeria’s solid mineral sector are inactive companies, thus causing government huge revenue losses.

According to the report, out of a total of 147 companies or entities audited by NEITI, only 78, consisting of six cement manufacturing; 44 construction; three minerals buying centres-two each for mining; quarry and sand dredging, were aggregated for the audit population based on their meeting the materiality threshold of N1 million and above.

It noted that total revenue yield from royalties by the major players during the period was N2.2 billion; earnings from ground rents/annual surface rents for the period was about N173.9 million; tax, N51.4 million; and levies N122.9 million.
The report noted, however, that government offices saddled with the task of managing the sector have no means of determining or tracing accurate royalties due to government.

For instance, the report showed that government was losing an average of N1,960 and N2,960 from royalty payment for every tonne of granite at an outdated price of N40 per tonne, thus meaning that an aggregated revenue loss of N4.05 billion was recorded from such price variations in the royalty payments on granite, laterite and sand by these companies.

The report further recommended improved and sustained transparent, independent and modern licensing system by the Nigerian Mining Cadastral Office (MCO) while Ministry of Mines and Steel Development should track the records of minerals consumed by manufacturing and multinational oil companies using solid minerals as their raw materials.

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