Sector contributed N814.59 Billion in 15 years, with 2021 earnings, the highest
• N7.94 Billion distributed to the federating units from the Solid Minerals Revenue Account
• Companies outstanding liabilities to government stood at N1.06 Billion
• Commends deployment of technology and innovation to drive reforms in the sector
• Laments low contribution of the SM sector to the economy

Nigeria earned the total sum of N193.59Billion from the solid minerals sector in 2021. This is the earnings from the sector since NEITI commenced the reconciliation of payments by companies and receipts by government in the sector.

The figure shows an increase of ₦60.32 billion or 51.89% growth, when compared to the 2020 revenue flows of ₦116.82 billion. This positive trend reflects a continuation of the upward positive trajectory observed in the sector over the past five years. This contribution, though a significant increase over past years, is still abysmal considering the potentials of the sector to the Nigerian economy.

This information and more are contained in the latest industry report of the solid minerals sector released by the Nigeria Extractive Industries Transparency Initiative (NEITI).

Presenting the report in Abuja, Executive Secretary of NEITI, Dr. Orji Ogbonnaya Orji stated that the 2021 Solid Minerals report reviewed, ascertained, reconciled and reported all revenues and investment flows to and from Government in the solid minerals sector.
According to Dr. Orji, “The report which is NEITI’s 12th, covered actual payments by 1,214 companies operating in the sector and receipts by three government agencies, the quantities of minerals that they produced, utilized and exported from the sector, reconciled the physical/financial transactions and undertook special verification on some processes”.

The NEITI report also covered balances payable/receivable from financial inflows, tracked the funds and utilisation meant for the development of solid minerals in Nigeria. The funds covered in the report include Natural Resources Development Fund, Solid Minerals Development Fund (SMDF), Ministry of Mines and Steel Development’s (MMSD) MinDiver Programme and Solid Minerals Development Funds under the Small and Medium Industries Equity Investment Scheme (SMIEIS) operated through the Bank of Industry- BOI, the emerging issues of beneficial ownership and contract transparency and finally made observations and copious recommendations that would inform policy decisions and implementation.

Dr. Orji further gave a breakdown of the revenues which shows that the Federal Inland Revenue Service -FIRS collected bulk of the revenue of N169.52Billion, the Mining Cadastre Office generated N4.3Billion while the Mining Inspectorate Department generated a total of N3.62 Billion.

The report also observed a consistent year-on-year increase in revenue to the federation account from the solid minerals sector in the past fifteen years (2007-2021). It puts the total revenue that accrued to the government during these years to N818.04bn, which the report pointed out, is significantly low compared to the economic potential of the sector, noting that of the N6.62 Trillion total government revenue in 2021, the solid minerals sector barely contributed 2.6%.
On Production, the solid minerals report disclosed that the total volume of solid minerals used or sold in 2021 was 76.28 million tons with a royalty payment of N3.57billion. The minerals with the largest production volume in the year under review are Granite, Limestone, Laterite, Clay and Sand. Dangote Plc accounted for the highest production in the year under review with a total production of 28.8 million tons. Bua and Lafarge accounted for 8.4 and 4.3 million tons while Zeberced accounted for 3.3 million tons respectively.
The NEITI report also pointed out that Ogun state recorded the highest production in the year under review, with a total of 17.5 million tons followed by Kogi state with 16.3 million tons and Edo with 8 million tons. The least production volume was recorded in Borno State with 25,500 tons.

NEITI also noted that there were increases in the number of licenses issued within the period. A total of 2,045 licenses were issued with exploration licenses accounting for 840 (increase of 62.79%), Small Scale Mining Lease (SSML) 771, Quarry Lease 255, Reconnaissance Permit 139 and Mining leases 40.

On Export, the total minerals exported in 2021 was 142.54 million tons with a Free on Board (FOB) value of $101.29 million, showing an increase of 138.57% from the $42.46 million reported in 2020 report, the report stated.

However, the solid minerals contribution to export value in 2021 was a mere 0.24%. The First Patriot Nigeria Limited based in Ebonyi state accounted for 44.26% of the total export value. China was identified as the principal destination of Nigeria’s mineral exports, accounting for 97% and 88% of the export volume and value. Other destinations for Nigeria’s minerals include Malaysia, Korea, Thailand UAE etc in that order. The report explained that Solid minerals export facilitates international trade and stimulates domestic economic activities by creating employment, enhancing production and increasing revenue generation and so should be encouraged.

On solid minerals contribution to the economy, the NEITI report revealed that the solid minerals sector contributed 0.63% to GDP. While there has been some improvement compared to previous years where it contributed 0.45% in 2020 and 0.26% in 2019, the sector has not yet reached its full potential in making a significant impact on the overall Nigerian economy.

The report identified a total sum of N1.06 Billion as outstanding company liability to government within the period under review. The liability was as a result of the failure of some of the companies to pay their annual service fees for the respective mineral titles. Annual service fee is a statutory payment by mineral title holders for each cadastral unit on mineral titles.

One of the success stories of NEITI in Nigeria’s solid minerals sector is the opening of the Solid Minerals Revenue Account. In June 2021, N7.94 Billion was distributed to the three tiers of government from that account based on the mineral revenue sharing formula, with a balance of N5.67Billion left in the account as at 31st December 2021. The Federal government got N3.64Billion, states N1.85Billion while local government councils got N1.42Billion, while 13% derivation share was N1.03 Billion.

The Report also revealed that “The seven (7) strategic minerals in the sector contributed a total of ₦1.42 billion in royalty payments, with limestone being the dominant contributor at ₦1.03 billion (73.07%). NEITI was optimistic that the commencement of full operations at the Dangote cement plant in Okpella, Edo State, royalty revenue from limestone would definitely increase and therefore called on the government through the MMSD, to urgently review the solid minerals roadmap and align it with current market realities, implement sustainable strategies to boost revenue from other strategic minerals and reduce reliance on single minerals like limestone.

NEITI reported that while there was an increase of 85% in the number of artisanal miners operators, from 1,273 in 2020 to 2,336 in 2021 across the 6 geo-political zones of the country, there are no commensurate data in the areas of production, royalty payments, exports, etc. to support this increase in operators.

Similarly, employment data from the sector showed that the sector’s contribution to employment in 2021 was 25,618, with 596 expatriates while 25,022 were Nigerians. In relation to gender, 92% of jobs were occupied by men, while women occupied 8%. No physically challenged person was recorded as being employed in the sector in 2021.

On Community Development Agreement (CDA) and Environmental Expenditure, the Report disclosed that out of the 121 companies covered, only 67 executed CDAs with their host communities. Please note that the Community Development Agreement is a prerequisite for exploitation of minerals in Nigeria as contained in Section 116(1) of the NMMA 2007. The NEITI report revealed that the signed CDAs in the custody of the MMSD(MECD) were not also publicly accessible, contrary to Nigeria’s commitment to the Open Government Partnership and the EITI’s requirement on Open Data. The report recommends that the MMSD should host all CDAs on its website to make them easily accessible to the public. This would allow citizens to monitor the social benefits mining companies provide to the host communities, while reinforcing trust between the government and the communities. Strong sanctions should also be meted on erring companies.

On social payments, NEITI observed that only 39 out of the 121 companies that met the materiality threshold made the mandatory social payments as contained in the CDAs signed with their host communities. 10 companies made only non -mandatory social payments/expenditures. This reveals poor compliance to the social benefit to host communities’ requirements of the NMMA 2007 and Nigerian Minerals and Mining Regulations (NMMR) 2011. NEITI however recommend that the MMSD and MCO should collaborate to monitor compliance to the terms of NMMA 2007 and MMR 2011 and impose appropriate penalties on defaulters.

The report also revealed that only 50 out of the 121 companies (41.32%) fully complied with environmental standards, indicating low overall compliance with environmental laws and regulations by most companies. NEITI recommends that the relevant agency of government (i.e., NESREA) should take strict actions by imposing sanctions on all non-compliant companies. Additionally, it should provide a list of all non-compliant companies to the MMSD for further disciplinary measures, such as license suspension or revocation, fines, and possible imprisonment as per the Harmful Waste Act, 2004.

NEITI reminded its stakeholders at the release of the report that it neither generates data nor manufactures information, adding that the reports being released was based on information and data mandatorily but voluntarily provided to the agency by relevant government agencies and companies covered by the NEITI process who also signed – off the final report as required by the NEITI process.

On Emerging Issues, the report recommended that the federal government should collaborate with relevant stakeholders to ensure that the Energy Transition Plan (ETP) is consciously implemented with the Energy Transition Minerals such as Cobalt, Lithium, Nickel, Copper, Graphite and Titanium beneficiated to increase revenue to government coffers and create employment opportunities for the teeming youths.

The NEITI report also underscored the need to shift attention from oil to the development of the solid minerals sector in the face of dwindling oil revenue. It noted that there have been significant reforms and development in the sector especially the deployment of technology and innovation- the Mining Cadastre Office (MCO) Electronic Mining Cadastre System (eMC+), a title Administration and Management System to ease mineral title administration; the Nigerian Geological Survey Agency (NGSA) technology for Geo-referencing and Geo-coding of Topographic Maps of Nigeria for integration into the Mining Cadastre Digital Database and the NGSA Z-300 LIBS Analyzer of mineral samples and exploration activities among other laudable initiatives.

The Executive Secretary Dr. Orji, explained that the EITI Standard which guides implementation in Nigeria requires a Multi Stakeholders Group (MSG) to provide strategic policy direction and leadership. Unfortunately the National Stakeholders Working Group (NSWG) was among the Boards of MDAs dissolved on June 19, 2023.

The NSWG is a mandatory requirement for any country’s membership of the 57-member international organisation. NEITI hereby renews its appeal to the government to put the NSWG in place in other to fix the gap in the its operations due to the peculiar nature of the agency.

On the use of the report, NEITI reaffirmed that when information and data on revenue from extractive sectors are publicly available and accessible, the citizens, civil society groups and media have the responsibility to ask questions about the management of Nigeria’s natural resources to address the country’s socio-economic problems and poverty reduction.
Dr. Orji used the opportunity to appeal to state and non-state actors to take seriously the contents of the NEITI reports and play their expected roles in the EITI/NEITI process. According to him “The civil society and media play very important roles in the EITI process, particularly, in the areas of dissemination, campaigns and advocacy on the implementation of the recommendations contained in the report and support the translation of the contents of the NEITI reports to visible impacts in the lives of all Nigerians.
The Report was by Amedu Onekpe and Co Chartered Accountants, an indigenous firm and is expected to guide policy makers in making quality decisions in the on-going reforms in the sector.

NEITI says it has simplified the report, printed copies and are circulating the report free of charge.


Deputy Director/Head Communications & Stakeholder Management