… Cement sector accounts for 60% earnings
From Uche Usim (Abuja) and Adewale Sanyaolu
Latest report from the Nigeria Extractive Industries Transparency Initiative (NEITI) released yesterday, has disclosed that Nigeria earned N69.2 billion from the solid minerals sector in 2015.
The N69.2 billion revenue represents an increase of 24 per cent from the N55.8 billion earned from the sector in 2014.
The disclosures contained in the latest independent audit report of NEITI are coming on the heels of the approval of the report by the National Stakeholders Working Group, which is the board of NEITI.
The audit report showed that the total production of solid minerals in the country stood at 39.27 million tonnes, representing a reduction of 17 per cent from the 47.1 million tonnes produced in 2014.
NEITI explained that the drop in 2015’s production was attributed to insecurity in parts of the country and more stringent approval processes for explosives used in mining sector. It explained that while mineral production dropped, government revenues grew in the same year.
“This increase in revenue was due to the growth in taxes collected from the sector and review of royalty rates paid by companies, which came into effect within the year under review,” the report stated. NEITI’s previous solid minerals audit reports had recommended upward review of Nigeria’s royalty rates to align with prevailing industry and present day realities.
The report also disclosed that the value of solid minerals exports in 2015 stood at $9.733 million, which was 1.45 per cent of non-oil exports for the year. Lead and zinc topped the chart with 79 per cent production valued at $7.7 million, while 175 ounces of gold valued at only $122,000 were exported during the period.
The report showed that the solid minerals sector contributed 0.12 per cent to Nigeria’s Gross Domestic Product (GDP) in 2015, a marginal increase of 0.01 per cent on the 0.11 per cent contribution of the sector to GDP in 2014.
According to NEITI’s Executive Secretary, Mr. Waziri Adio, the report shows evidence that the contribution of the solid minerals sector to government revenues and macro-economic indicators were beginning to improve, even if marginally, adding that the sector could definitely contribute more to revenues, job and wealth creation, exports, imports substitution, industrial development and overall national growth.
“Faithful and sustained implementation of the roadmap developed by the Ministry of Mines and Steel Development and of the recommendations in this report will be necessary,” Adio advised. The report equally highlighted the specific contributions by companies and states to the sector’s revenue growth and development.
“Cement manufacturing companies were the major revenue contributors to the sector, accounting for over 60 per cent, while construction companies and real mining companies contribute about 31 per cent and 8 per cent respectively. For instance, three states – Ogun, Kogi and Cross River and the FCT accounted for about 70 per cent of the production volumes in 2015. However, Ogun State topped the table with 36 per cent.”