Solid minerals boosted the Federation Account by N53.88bn within a period of four years; an audit of the nation’s solid mineral sector has shown.
The audit, commissioned by the Nigeria Extractive Industries Transparency Initiative, covered the period 2007 to 2010, and was produced by a firm of chartered accountants, Haruna Yahaya & Company.
The details of the report obtained by our correspondent in Abuja on Tuesday also showed that the nation lost N4.04bn in the solid mineral sector between 2007 and 2010 due to the use of outdated rates in the calculation of royalty payments.
An analysis of the revenue generated within the period of the audit showed that tax paid by operators in the solid minerals sector amounted to N51.37bn; royalty, N2.21bn; ground rent/annual surface rent, N173.94m; and levies, N122.92m.
The report stated, “The total tax paid by the major players (companies/entities) in 2007-2010 was N51,370,294,323. The total royalty paid by the major players (companies/entities) in 2007-2010 was N2,212,223,306.
“The total ground rents/annual surface rents paid by the major players (companies/entities) in 2007-2010 was N173,938,401. The total levies paid by the major players (companies/entities) in 2007-2010 were N122,918,513.”
The report indicated that the country could have made more from the solid minerals sector but for some untoward practices in the industry, which included improper assessment and smuggling.
The report stated, “Operators in the solid minerals industry in Nigeria often mine products without disclosing the actual production, leading to the understatement of quantity mined and total revenue realised because the Ministry of Mines and Solid Minerals do not have scientific methods/equipment to verify the production.
“Payments made by companies for royalties are based on self-assessment without any means of verification by the regulatory government agencies. Payments of royalties were based on royalties list prepared by the Ministry of Mines and Steel Development in 2002, royalty payments on minerals is based on the adopted price of 2002 as against the current price.
“For example, royalty payment for granites was based on N40 per tonne, which means the average price of N800 per tonnage of granite as against the prevailing price of between N2,000 and N3,000, within the audit period.
“There is no proper assessment of operators in the solid minerals sector in Nigeria as it relates to what they produce, sell or consume. Payment is solely based on what the operator disclose to the regulators. The operators do not even keep good record of receipts issued to them by government agencies.”