Economy

Nigeria makes N79.9 billion in revenue from solid minerals – Report

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Nigeria recorded an increase in revenue from its solid minerals sector in 2019 as it earned N79.96bn from the industry during the period, data released on Sunday by the Nigeria Extractive Industries Transparency Initiative showed.

Figures from NEITI’s 2019 Audit Report of the Solid Minerals Sector showed that the N79.96bn accruals to the federation and other subnational entities was a 15 per cent increase when compared to the N69.47bn recorded in 2018.

The 2019 earnings accounted for 16 per cent of the total revenues of N496.28bn that had accrued to the federation from the sector over the period of 13 years (2007 to 2019) and was the highest since 2007 when NEITI commenced reconciliation of payments in the solid minerals sector.

A breakdown of the 2019 receipts as reported by NEITI showed that taxes to the Federal Inland Revenue Service on behalf of the federation accounted for N69.92bn or 87.4 per cent of the total.

Fees and royalties paid to the Mining Cadastre Office and Mines Inspectorate Department accounted for N2.37bn or three per cent, and N2.55bn or 3.2 per cent, respectively.

Also, revenue accruals to the states stood at N5.1bn, representing a 42 per cent increase when compared to the N2.1bn recorded in 2018. The FIRS accounted for the highest flow to the coffers.

The NEITI report also disclosed that the outstanding amount of ?8.887bn which accrued from the solid minerals sector as at December 31, 2019 was distributed among the three tiers of government in May 2020 using the revenue sharing formula.

The balance as of October 31, 2020 was N3.948bn.

A breakdown of the distribution showed that the federal and state governments received N4.073bn or 45.83 per cent and N2.065bn or 23.25 per cent respectively.

Besides, Local Governments got N1.592bn or 17.92 per cent, while the balance of N1.155bn was distributed to only solid minerals producing states as their shares of the 13 per cent derivation.

According to the report, out of 702 companies that paid royalties to the government in 2019, only 74 met the materiality threshold of ?3m, representing a 7.2 per cent increase when compared to 69 entities that met the materiality threshold in 2018.

“These 74 companies accounted for 87.63 per cent of total royalties of N2.5bn paid in 2019, with the top five companies (Dangote Cement Plc, Lafarge Plc, Dangote Industries, Julius Berger, and Reynolds Construction) paying more than 50 per cent 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 in 2019.

A 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.

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