Audit finds 38,000+ ton discrepancy in Nigerian mineral shipments

Mining firms shipped more than 38,000 tons of solid minerals from Nigeria and were apparently allowed by the customs service without required permit from the mines ministry – a pointer to revenue loss to the country, a government audits says.

The 2021 solid minerals audit report by the Nigerian Extractive Industry Transparency Initiative (NEITI) said the difference in the amount of exported minerals reported by the Nigeria Customs Service and the Ministry of Mines and Steel Development showed shipments were allowed without permits from the ministry.

“The report noted a significant variance of 38,145.85 tons between solid minerals export data reported by NCS and MMSD-MID,” it said in the report released this week.

While the quantity involved is far less than the total 142.5 million tons officially exported from Nigeria that year, it indicated that companies were exporting without paying royalties to the government, the report said.

“This variance is as a result of non-collaboration between the NCS and MMSD and implies that some companies are exporting without obtaining relevant permit from the MMSD and payment of royalties on the minerals exported,” it noted.

The report urged, “The NCS should enforce compliance on export permits from MID prior to mineral export,” referring to the ministry’s Mines Inspectorate Department.

Struggling industry

Nigeria’s effort to develop its solid minerals industry and increase revenue from the sector has been impaired by illegal mining and shipments of minerals. The lack of required infrastructure has also turned off investments into the sector.

The audit report by NEITI said in 2021, solid minerals contributed less than 1% to Nigeria’s gross domestic product and made only 2.62% of Nigeria’s total revenue. It also contributed a measly 0.24% to exports.

Nigeria realized N193.6 billion from the sector – 52% above the previous year, raising the total revenue from the sector in the last 14 years to N814.6 billion.

The report said of 1,214 companies reviewed, only 914 paid royalties to the government.

Only N1.4 billion was paid as royalty for the government’s seven “strategic minerals”, namely, gold, coal, bitumen, limestone, lead/zinc, iron ore and barites. Limestone contributed 73% of that amount.