Mining Companies in Nigeria Default on N1.06bn Service Fees – NEITI Report Reveals
The Nigeria Extractive Industries Transparency Initiative (NEITI) has recently published its Industry report for the Solid Minerals Industry for 2021, and the findings are cause for concern. According to the report, a considerable 238 companies owe the Federal Government approximately N1.06bn in annual service fees. This marks a notable increase from the N654.28m owed in 2020, as stated in the report.
The report further highlights that out of a total of 1,214 companies operating in the sector, only 914 have made royalty payments. Among those, 121 companies have met the materiality threshold and are responsible for a significant 92% of the total royalty payments.
In terms of revenue, the total receipts by federal, states, and local government agencies reached N193.59bn in 2021. The report also revealed that a total of 2,045 licenses were issued during the year under review, with a total mineral production of 76,277,187 tons. The most produced minerals in the year were granite, limestone, laterite, clay, and sand.
Dangote, BUA, and Lafarge emerged as the major contributors to production, with a combined production quantity and royalty payment of 41,438,553 tons and N1.37bn respectively. Dangote alone accounted for a substantial share of total production (37.72%) and royalty (25.55%), reflecting the significant role played by these major companies in the mining sector.
The report also delved into the production volumes for different regions, with Ogun recording the highest production at 17.5 million tons, followed by Kogi with 16.3 million tons, and Edo with 8 million tons.
Dr Ogbonnaya Orji, the Executive Secretary of NEITI, expressed concern over the 51.89% increase in revenue flows from 2020 to 2021, stating that the figure, while improved, was still subpar considering the potential of the sector to the Nigerian economy. Meanwhile, the Speaker of the House of Representatives, Tajudeen Abass, delivered remarks at the report’s unveiling, emphasizing its importance in sanitizing the extractive sector to enhance job creation and revenue generation.
The NEITI Industry report for the Solid Minerals Industry for 2021 serves as a wake-up call for the mining sector in Nigeria. With hundreds of companies defaulting on their service fee payments, it is imperative for the government to take swift and decisive action to ensure compliance and accountability in the industry. The potential of the mining sector to contribute significantly to the Nigerian economy cannot be overstated, and it is crucial that all stakeholders work together to harness this potential for the benefit of the nation.
