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Over N17 billion royalties unremitted as solid minerals export policy lingers

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Olamilekan Adegbite is Nigeria’s Minister of Solid Minerals and Steel Development

The Nigerian Government is losing huge revenue from the solid mineral sector in the country, due to the lack of standardized guideline procedure and requirements for exporters despite the need to attract investments in the sector.

Despite attempts to develop the draft policy since 2017 without success after the stakeholders’ consultative forum on the policy was first set up, as much as N17.5 billion worth of royalties is due by operators in the sector, as a result of the absence of a clear operation procedure and guidelines for export operations in the sector.

The Minister of Mines and Steel Development, Olamilekan Adegbite painted the sad situation in the sector at another session of the Forum’s meeting in Abuja to present the progress report to the Minister of Finance Budget and National Planning Mrs Zainab Shamsuna Ahmed and also to solicit input from stakeholders for the Policy.

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He said: “In the period spanning January 2013 to June 2017, a total of 2,670 mineral exports were made from Nigeria. Of these, only 56 were issued Mineral Export Permits by the Ministry of Mines & Steel Development and acknowledged to have paid royalties. During this period, unpaid royalties amounted to N17.12 billion which are still outstanding to the Federation Government.

“The absence of a handbook for standardized solid minerals export has also occasioned a situation where prices in the local mineral market are almost at par with international price benchmarks; this impedes ease of business for genuine exporters, as attaining reasonable margins become purposes, where profit margins are not the necessary incentives.”

The Minister, represented by the Permanent Secretary in the Ministry, Dr. Oluwatoyin Akinlade, traced the actual journey of the initiative to the 28th of October 2017, when the Ministry made presentations at the consultative and sensitization workshops for the Revised Non–oil Export guidelines held at Abuja and Lagos respectively.

His words: “The non-oil export guidelines did not address the peculiarity of mineral exports, consequently a case for specific guidelines to guide solid minerals export was made by the Ministry of Mines & Steel Development and adopted for consideration by the export stakeholders.

“The guidelines were subjected to the rigorous scrutiny of the Extractive Hub through the Adam Smith Consultants and were compared with over 20 export guidelines from mineral exporting countries worldwide. The final draft was sent to the federal ministry of finance, budget & national planning for ratification and approval.

“After the consultative forum, the document was subjected to further scrutiny by the Presidential Enabling Business Environment (PEBEC) to ensure that the provisions meet with the Trade Across Borders indicators and would promote ease of doing business across borders.

The Minister of Finance Budget and National Planning, Mrs Zainab Shamsuna Ahmed explained that the need to improve procedures, documentation and regulations in the solid minerals sector had become more urgent in view of the present global economic challenges occasioned by the COVID-19 Pandemic as well as volatility of global oil prices which is the Country’s main foreign exchange earner.

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This effort, she added, therefore was another of such deliberate Federal Government policy measures that is aimed at developing its monumental mining potentials and minimizing dependency on oil as the nation continues her drive towards a progressively diversified economic base.

Again she stressed: ”It is worthy of note that the mineral sector is generally characterized by the absence of requisite facilities and expertise to identify and assign accurate values to mineral consignments for proper declarations of their actual quantities, qualities and prices. Also, the inability to synchronize quality, price and country certificate of mineral origin negatively impacts repatriation of exports proceeds and collection of fees/royalties.

“Accordingly, streamlining the operations of the sector would help guarantee proper regulation of the sector and promote the deployment of appropriate technology/expertise to determine the quantity and value of minerals mined and exported. In addition, it would facilitate the collection of all the royalties/fees due to the Government from the export, ensure the integrity of data and determine the possible mineral derivation to their States of Origin.

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