The Nigeria Extractive Industries Transparency Initiative (NEITI) has said that Nigeria generated N79.96bn from the solid minerals sector in 2019, the highest in 5 years.
The figure, which represents accruals to the Federation and other subnational entities, represents a 15% increase when compared to the N69.47 billion that was achieved in 2018.
This disclosure is contained in an audit report on the solid mineral, which was released on Sunday by NEITI in Abuja.
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What the NEITI report is saying
NEITI in its report said, “The 2019 earnings accounted for 16 per cent of the total revenues of N496.28billion that have accrued to the Federation, from the sector, over a period of 13 years (2007 to 2019).
“And it is also the highest since 2007 when NEITI commenced reconciliation of payments in the solid minerals sector.’’
The report, in a breakdown of the receipts, showed that taxes from the Federal Inland Revenue Service (FIRS), accounted for N69.92 billion or 87.4% of the total as revenue accruals to the States stood at N5.1bn, representing a 42 per cent increase when compared to the N2.1bn recorded in 2018.
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The NEITI report also disclosed that the outstanding amount of N8.887billion, which accrued from the solid minerals sector as of December 31, 2019, was distributed amongst the three tiers of government in May 2020, based on the extant revenue sharing formula.
Also, a breakdown of the distribution, shows that the Federal and State governments received N4.073billion or 45.83per cent and N2.065billion or 23.25 per cent respectively, while local governments equally received N1.592billion or 17.92%, while the balance of N1.155billion was distributed to only solid minerals producing states as their share of the 13% derivation.
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According to the report, out of 702 companies that paid royalty to the government in 2019, only 74 companies met the materiality threshold of N3million, which represented a 7.2% increase when compared to the 69 entities that met the materiality threshold in 2018.
The report said, “These 74 companies accounted for 87.63 per cent of total royalties of N2.50bn paid in 2019, with the top 5 companies – Dangote Cement PLC; Lafarge PLC; Dangote Industries; Julius Berger; Reynolds Construction – paying more than 50% of total royalties.”
A look at the revenue flows from the solid mineral sector in the report also showed that the sum of N79.96 billion recorded in 2019 was the highest in the past 5 years, followed by N69.47billion and N69.2billion recorded in 2018 and 2015 respectively. In addition, N52.76billion was recorded in 2017, while the sector accounted for N41.98bn in 2016.
On minerals exports, the report showed that the solid minerals sector accounted for N124.23 billion of the total government exports of N24.275 trillion for 2019, representing 0.51 per cent of total exports for the year.
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What this means
An increase in Nigeria’s earnings from the solid minerals sector reinforces the Federal Government’s resolve to diversify the economy and reduce the over-dependence on oil revenue.
This will help the FG tap into the country’s huge mineral resources, which have remained largely untapped.
Wit
With all this money generated Nigeria still borrowing money
And where Is it? Fool ish
But the person who gave Ministry of Solid Minerals the idea of powder factor that revolutionalised revenue collection since early2006 was not recognized. Dr J. I Nwosu