Nigeria has recorded a 15% increase in earnings from the mining sector. This is according to a new report released by the Nigeria Extractive Industries Transparency Initiative (NEITI).
The data showed that the country earned US $195million from the solid minerals sector in 2019, increasing from US $170million recorded the previous year. The 2019 earnings accounted for 16% of the total revenues of US $1.2 billion that have accrued to the federation from the sector over the period of 13 years (2007 to 2019).
It also represented the highest since 2007 when NEITI commenced reconciliation of payments in the solid minerals sector, now in the 10th cycle of the independent audit. A breakdown of the 2019 receipts as reported by NEITI showed that taxes to the Federal Inland Revenue Service (FIRS) on behalf of the federation accounted for 87.4% of the total, while fees and royalties paid to the Mining Cadastre Office (MCO) and Mines Inspectorate Department (MID) accounted for 3.0 % and 3.2% respectively.
Revenue accruals
Revenue accruals to the states stood at US $12million, representing a 42% increase compared to the US $5million recorded in 2018, with FIRS accounting for the highest flow to the coffers. The outstanding amount of US $22million, which accrued from the solid minerals sector as of 31st December 2019, was distributed amongst the three tiers of government in May 2020 using the revenue sharing formula while the balance as of 31st October 2020 was US $10million.
The federal and state governments received 46% and 23% while local governments got 18% with the 13% balance distributed to only solid-minerals-producing states. According to the report, out of 702 companies that paid royalties to the government in 2019, only 74 companies met the materiality threshold of US $7000, representing a 7.2% per cent increase compared to 69 entities that met the threshold in 2018.
A total of 1,296 mineral permits were issued by the MCO in 2019, with small-scale leases being the highest with 602 permits. The 2019 audit report revealed that the total volume of minerals produced was 59.82 metric tonnes, while a five-year trend analysis of minerals production showed that the total minerals production in the past five years stood at 224,188,056 tonnes, out of which 59.82mt was produced in 2019. This signified the highest in the five years reviewed.
