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Published On: Mon, Mar 16th, 2020

Solid Minerals Sector contributed N416.3bn to federation revenue in 12 years

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By Etuka Sunday

The Solid Minerals Sector contributed a total sum of N416.3 billion as revenues between 2007 and 2018, an Audit Report by the Nigeria Extractive Industries Transparency Initiative (NEITI) has revealed.
NEITI said, the solid minerals sector contributed N69.47 billion to federation revenue in 2018, the highest so far since NEITI commenced reconciliation of payments in the sector.
It said, “the figure shows an increase of N16.71 billion representing 31.67% over the 2017 revenue of N52.76 billion. The earnings (N69.47 billion) also accounted for 16.69% of the total revenues (N416.3billion) that accrued to the sector from 2007 to 2018.”
The audit report reconciled companies’ payments and government’s receipts from the sector in 2018 as well as tracked production volumes and trends of revenues from the sector to the federation account from 2007 to 2018.
Breakdown of the receipts showed that taxes to the Federal Inland Revenue Service (FIRS) accounted for N65.69 billion (94.56% of the total) while fees and royalties paid to the Mines Inspectorate Department (MID) and Mining Cadastre Office (MCO) accounted for N2.21 billion (3.18%) and N1.57 billion (2.26%) respectively.
According to the NEITI report, “Nigeria has published eight cycles of solid minerals audit reports since it signed up to the EITI. The sector has contributed ₦416.32billion in revenues to the federation in 12 years. Over half of this figure or (N279.0 billion) was earned between 2015 and 2018”. This shows that there had been a remarkable increase in revenues accruing to the Federation from the solid minerals sector over the years.
The just released report further highlighted that the sector had over the years, also witnessed fluctuations in revenue earnings. For instance, in 2015, N64.46billion accrued to the federation, while in 2016, the earnings dipped to N43.22billion. It will be recalled that 2016 was also the year that the Nigerian economy slid into recession.
The report disclosed that the main sources of revenue flows from solid minerals remains various categories of taxes, royalty, permits, annual services and sub-national payments. The report also stated that sub-national payments and other taxes accounted for “₦1.54billion representing about 2.23% of total government revenue from the sector”.
On production, the NEITI 2018 Solid Minerals Report disclosed that 46.68 million metric tons of minerals valued at N47.87 billion were produced in Nigeria during the period. “The production data was based on minerals either used or sold during the year”.
A breakdown of the production volumes showed that limestone and granite accounted for about 80% of the total minerals produced. Limestone alone contributed 54.85% while granite accounted for 23.88% of minerals mined.
On state-by-state production, the report disclosed that in 2018, most of the mining activities in the country took place in Ogun State. The state accounted for 12.66 million metric tons (27.13%) of the total volume produced during the period under review.
Ogun State was followed by Kogi and Benue states, each accounting for 22.88% and 10.10% respectively. However, on the bottom of the table are states like Enugu and Borno states which contributed 0.02% and 0.001% respectively.
The report also revealed that Dangote Cement Plc and Larfarge Africa Plc dominated activities in minerals produced by companies. The two companies contributed 57.22% of the total minerals produced in 2018. From the report, while Dangote cement accounted for 46.38%, Larfarge Africa was responsible for 10.84%.
The report disclosed that the sector’s contribution to employment in 2018 was 9,873, with more Nigerian nationals employed by the sector. In relation to gender, 96.53% of jobs were occupied by men, while women took 3.47%. Only six physically challenged persons were recorded as being employed in the sector in 2018.
On the contribution of the solid minerals industry to Nigeria’ GDP, the report aligned with the National Bureau of Statistics figure of N224.79 billion representing 0.18% of the country’s GDP. A breakdown of this figure shows that quarrying and other minerals accounted for 0.16%, while coal and metal ores accounted for 0.01% each.

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