As oil revenue falls, can Nigeria's solid minerals sector rise to the occasion?
There's no doubt that solid minerals offer a great potential in improving our revenue, but first, how did this sector contribute to the Economy in 2018 and what are the prevalent issues?
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In 2018, Nigeria sold 46.68m tons of solid minerals and accrued a total revenue of N69.47b . The solid mineral sector contributed 0.18% to the total GDP in that same year
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A total of 1,516 mineral licences were issued, and 46.68m tons were sold compared to the 35.33m sold in 2017. While Ogun State produced the highest volume, Dangote Cement Plc made a contribution of 46.38%, and limestone accounted for about 54.85% of the total volume produced.
There was a 382.84% increase in the Free on Board value of the solid minerals exported in 2018 from 2017. Overall, the solid mineral contributed only 0.18% to the total GDP
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A total number of 9,873 people were employed in the sector in 2018 with 5,823 being indigenes of the mining location, 3,759 are Nigerians from other states while 291 are expatriates. This number represents just about 0.014% of Nigeria’s workforce
The export data include minerals that were not captured in the production data, and as such, there were no records of royalty payments on these minerals. At least 30 companies were in this category and this resulted in revenue loss of N45.3b for about 23.585mt
There’s also a record of about 30 other companies who actually paid royalties, but their names were not included in the mining register. This led to the inaccurate calculation of revenue accruable from those companies
This issue of lack of adequate data raises serious concerns regarding proper management of the sector and accurate information on revenue generated, for example, what are the key metrics used for calculating revenue.
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There is a need to ensure that internal control mechanisms are strengthened around payments, and records must be properly kept and classified. Those who operate in the sector must be duly licensed and FIRS system needs to be functional and accurate to avoid errors
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