The Nigeria Extractive Industries Transparency Initiative (NEITI) has revealed that 238 mining companies owe the Federal Government N1.06 billion in annual service fees. This information was part of NEITI’s Industry report for the Solid Minerals Industry for 2021.
The report indicated that the debt has increased from N654.28 million in 2020. It also stated that out of 1,214 companies in the sector, 914 have paid royalties. Significant contributors to production include Dangote, BUA, and Lafarge.
NEITI’s Executive Secretary, Dr. Ogbonnaya Orji, mentioned that the 2021 figure showed a 51.89% increase compared to 2020. However, he said the figure is still disappointing given the sector’s potential.
The recent disclosure by NEITI about the debt owed by mining companies to the Federal Government is a red flag. It’s not just a matter of unpaid fees; it’s a question of accountability and transparency in a sector with enormous potential.
The increase in debt from 2020 to 2021 is alarming. It suggests a lack of enforcement and oversight, which could lead to revenue loss for the government. This is unacceptable, especially considering the sector’s potential to contribute to the economy.
Immediate action is required. The government must tighten its oversight mechanisms and ensure that companies are held accountable for their financial obligations. Transparency and accountability must be the watchwords for the mining sector to reach its full potential.
Did You Know?
- Nigeria has vast mineral resources, including tin, limestone, coal, and gold, but the sector is underdeveloped.
- The mining sector contributes less than 1% to Nigeria’s GDP.
- NEITI was established in 2004 to promote transparency and accountability in managing Nigeria’s oil, gas, and mining revenues.
- Artisanal and small-scale mining is prevalent in Nigeria, often without formal licenses.
- The term “royalty” in mining refers to a payment made to the government for the right to extract natural resources.