Solid minerals exported without permits – NEITI

31 May 2016, Abuja – An independent audit of the operational processes and financial payments to Nigeria from companies that mine her solid mineral resources has shown that more of the country’s minerals were exported from her shores without legal permits.

NEITI-logoThe report explained that while it is statutory that companies obtain regularly permits from the country’s ministry of trade before they can export her solid minerals, most of the companies that engage in the export trade have overtime sidestepped this requirement, thus costing the country revenues in export duties amongst others.

It also revealed that the country’s Mines Inspectorate Department (MID) cannot accurately account for how much solid minerals were mined and taken out of the country at any period, saying that the MID mostly provided inaccurate production data when requested.

These data according to the report for the sector’s operations in 2013 have often conflicted with what producers provided.

The MID, it explained does not also use its procedures or systems to determine production data or volumes but frequently relied on sales volume of operators. This development, industry operators say, squeals of corrupt processes and regulatory incompetence.

“The Nigerian Minerals and Mining Act 2007 require that any exporter of solid minerals must request for permit to export. The audit could not be provided with any evidence of request for permit to export minerals by the exporters.
“The audit has observed the incessant smuggling of solid minerals out of the country by middle men and smugglers.
“The audit has observed persistent activities of some foreign nationals operating in the sector that constitute significant buyers of the solid minerals that are mined by artisanal and small scale miners, illegal miners,” said NEITI in the report, which was presented by Minister of Solid Minerals Development and chair of NEITI board, Dr. Kayode Fayemi.

NEITI said the implications of such anomaly was reduced value addition; opportunity for revenue leakages; and inaccurate production transaction records.
It said on production volumes and revenue: “We understood that the production data provided by the Mines Inspectorate Department was based on self-declarations submitted from the extractive companies in the solid minerals sector.”

“The Mines Inspectorate Department does not use its own procedures and systems to collect and control production data reported by mining companies.

“In fact, we noted that for commodities such as sand, companies report sale volumes and not production data. Some of the quantities reported by the Mines Inspectorate Department do not match the corresponding royalty amounts,” the report added.

Similarly, NEITI disclosed that up to N2, 037,594,163.80 which accrued from the solid minerals sector for the year ended 2013 were not yet reallocated to about 26 beneficiary states.

This it explained was confirmed by the Revenue Mobilisation and Fiscal Allocation Commission as being in existence.
The monies it said represent 13 per cent derivative benefits to states where minerals are mined.
“The NSWG and the government should take quick action to ensure fiscal allocations and statutory disbursements to beneficiaries from the proceeds that accrued from the mineral resources.

“This will lead to a more transparent and prudent management of public revenues from Nigeria’s extractive industries by various beneficiaries,” the report added.

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