Ogun leads as Nigeria’s solid minerals output jumps by 33%

The Nigeria Extractive Industries Transparency Initiative (NEITI) says the solid minerals sector contributed N43.22 billion to government coffers in 2016.

In a report released by the agency on Tuesday, it was also recorded that Nigeria’s solid minerals production jumped by 33 percent in the same year, with Ogun state taking the lead in production and revenue receipt.

The report, signed by Orji Ogbonnaya Orji, NEITI’s director, communications and advocacy, gave a breakdown of figures generated from the sector and how it fared in the 2016 fiscal year.

Here are the highlights of the report:

Taxes collected by the Federal Inland Revenue Service (FIRS) accounted for N40.38 billion (93.43%) while fees collected by the mining cadastral office stood at N1.15 billion (2.66%).

The mining inspectorate department (MID) recorded N1.64 billion as royalty payments, an increase of 30.15% over the N1.27 billion reported as royalty payments in 2015.

The audit conducted under the EITI principles and standard reconciled payments made by mining companies in terms of taxes, royalty, and rents against receipts of such payments by relevant government agencies.

Total minerals production for 2016 was 41.8million tonnes valued at N34.09billion, representing 33% increase on the N25.56bn reported in 2015.

However, tax collection and payment of other fees for 2016 reduced by 32% when compared to N63.98bn recorded in 2015.

While 651 extractive companies made royalty payments in 2016, 56 companies that met the materiality threshold of N3million and above were considered for reconciliation.

The companies that met this threshold accounted for 86.87% of the total royalties paid.

OGUN, KOGI, FCT IN THE LEAD

Ogun state contributed 33.49% to the total production of minerals to top the table, followed by Kogi state with a contribution of 19.7%, while the Federal Capital Territory came third with 6.20%.

Dangote Cement Plc, West African Portland Cement Plc, and United Cement Company of Nigeria Limited (UNICEM) contributed 70% of total production, showing that the cement sub-sector is still dominant in solid minerals production activities.

Further analysis of production by minerals types shows that limestone was the most produced mineral and accounted for 49.35% of the total solid minerals production, followed by granite with 31.32%.

Exports from the sector stood at ₦11.16bn, representing 3.38% of the N330.01bn for non-oil exports and 0.13% of total export of ₦8.53trillion.

China was a major destination of Nigeria’s solid minerals in 2016, accounting for 53.63%, followed by Spain and India which accounted for 26.48% and 8.90% respectively.

The report put the Free on Board (FOB) value of the solid minerals exported in 2016 at $40.934 million while the overall contribution of the sector to the country’s GDP was put at ₦87.61billion representing 0.13 % of the total GDP of N67.9 trillion.

The sector has witnessed a steady, even if marginal increase in its contribution to the GDP from 0.11% in 2014, 0.12% in 2015 to 0.13% in 2016. The sector also contributed 0.3% to national employment in 2016.

A total of 4,575 valid minerals titles spread across the various states of the federation were recorded. This comprises 1,751 exploration licenses, 208 mining leases, 1,563 quarry leases, and 1,053 small-scale mining leases.

Out of the total valid titles in the MCO register, 1,465 titles were issued while 1,030 were revoked and 14 were transferred.

The sum of ₦9.923bn was shared by the three tiers of government in 2016, as the accumulated revenues from 2007 to 2014 from the sector.

A breakdown of the figure shows that the federal government got N4.547bn while states and local governments shared N2.306bn and N1.778bn respectively.

Ogun state received the highest share of N369.84m while Kogi and Cross River states received N317.66m and N237.10m respectively.

Other states among the top five recipients are Kano state received N208.83m while Oyo state received N200.4m. Ekiti state and Bayelsa state received the lowest share of N91.25m and N76.66m respectively.

The report is the seventh NEITI report in the series of independent reports on the solid minerals sector.

According to NEITI, the 2016 oil and gas report is currently at the final stage of completion and will be released soon, while the 2017 audit process is ongoing.