Nigeria’s solid minerals revenue grows to N79.96bn

Solid minerals revenue grows by 15% to N79.96bn

The largest African nation revenue from solid minerals sector grew by 15 percent to hit N79.96 billion in 2019.

This was contained in an audit report by the Nigeria Extractive Industries Transparency Initiative, NEITI.

The 2019 audit report of the solid minerals sector released by NEITI on Sunday stated that revenue from the sector in 2018 was N69.47 billion.

NEITI disclosed that 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 the period of 13 years (2007 to 2019) and is also the highest since 2007 when it commenced reconciliation of payments in the solid minerals sector.

Despite the increase however, the solid minerals accounted for just 0.51 percent of total export in 2019. The report showed that the sector recorded N124.23 billion of the total government exports of N24.275 trillion.

According to the agency, a breakdown of the 2019 receipts from the sector 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 while fees and royalties paid to the Mining Cadastre Office, MCO, and Mines Inspectorate Department, MID, accounted for N2.37 billion or 3.0 percent and N2.55 billion or 3.2 percent respectively.

The report also stated that States got N5.1 billion, representing a 42 percent increase when compared to the N2.1 billion recorded in 2018. The Federal Inland Revenue Services (FIRS) accounted for the highest flow to the coffers.

NEITI also reported that the outstanding amount of N8.887 billion which accrued from the solid minerals sector as at 31st December 2019 was distributed amongst the three tiers of government in May 2020 using the revenue sharing formula.

It added that the balance as at 31st October 2020 was N3.948 billion.

The report also showed that that the Federal and State governments received N4.073 billion or 45.83 percent and N2.065 billion or 23.25 percent respectively. Local governments got N1.592 billion or 17.92 percent, while the balance of N1.155 billion was distributed to only solid minerals producing states as their shares of the 13 percent derivation.

According to the report, out of 702 companies that paid royalties to the government in 2019, only 74 companies met the materiality threshold of N3 million, representing a 7.2 percent increase when compared to 69 entities that met materiality threshold in 2018.

“These 74 companies accounted for 87.63 percent of total royalties of N2.50bn paid in 2019, with the top 5 companies (Dangote Cement PLC; Lafarge PLC; Dangote Industries; Julius Berger; and 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. Breakdown showed that Small Scale Mining Leases were the highest with 602 permits granted. This was followed by 501 and 169 for Exploration Licenses and Quarry Leases respectively, while the least figure of 24 was recorded for Mining Leases.

The report also revealed that the total volume of minerals produced was 59.82mt. A five year trend analysis of minerals productions shows that the total minerals production in the past five years stood at 224,188,056 tons out of which 59.82mt was produced in 2019, signifying the highest in the five years reviewed.

The 2019 volumetric figures also represents an increase of 29.41 percent 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.

To address the issue of non-payments of taxes and multiple tax identification numbers, TIN, the NEITI report recommended that the FIRS should carry out comprehensive tax audits to recover all unpaid taxes by companies and also work in collaboration with the Ministry of Mines and Steel Development to reconcile the multiple tax identification numbers by some companies.

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