• Inability to access N2.5b BoI fund crippling operations
The Federal Government yesterday, in Abuja, said a new Mineral Export Guidelines is being finalised to clampdown on revenue leakages in the mining sector, especially in the activities of tax evaders.
For stakeholders who gathered at the 2019 Nigeria Mining Week, there are concerns about lingering challenges in the nation’s extractive sector. They include Nasarawa State Governor, Abdullahi Sule; President, the Mining Association of Nigeria, Kabir Mohammed; Partner at PricewaterhouseCoopers, Pedro Omontuemhen; Group Executive Director at Dangote Industries Limited, Devakumar Edwin; and PricewaterhouseCoopers’s Associate Director, Energy, Utilities & Resources, Habeeb Jaiyeola.
The Minister of Mines and Steel Development, Olamilekan Adegbite, accused some mining companies operating in the country of under-remitting taxes to the Federal Government.“There would be no room for royalty payment evasion. All mineral exports shall be inspected by government-appointed independent pre-shipment inspection agents, who are empowered by law to render quantity and quality control services and monitor pricing. This control mechanism is in accordance with the Pre-shipment Inspection of Exports Act,” he said.
Adegbite, noting that although mining has a significant role to play in
the diversification of the economy, but the sector is still classified
as non-performing; despite the host of many mineral resources embedded
within the states in Nigeria.
According to him, the Federal Government will partner with a broad spectrum of stakeholders in the industry to deepen the reforms, fostering conducive ecosystem for private sector participation and growth.
The Minister said strong geosciences base network is currently being built to enhance the nation’s competitiveness as a world class mineral exploration destination that foreign investors would find attractive.
Adegbite said: “Nigeria has only been able to attract 0.12 per cent out of the five per cent share of exploration investment flowing into the West African region.”
Sule, on his part, stressed the need for the Federal, states and Local governments as well as mining communities to work together to address dichotomy in the land use act, adding that remittance of taxes to states from mining companies remained poor.“Under-declaration of mining products in various states and unwholesome activities of miners affect the revenue drive of solid minerals,” he said.
Sule equally called for the disbursement of the 13 per cent derivative fund to mining states.He said while there are over 400 minerals title holders operating in the state, less than 10 are currently carrying out mining operation, adding that funding and other challenges continued to hamper the growth of the sector.
Commenting, Omontuemhen urged government to prioritise mining considering the volatility of the oil and gas sector, which contributed to the last economic recession experienced in the country.Lauding government’s effort to revive the sector, Omontuemhen said the sector is critical to Nigeria leading as much as 100 million people out of poverty as projected by the current administration.He noted that in some African countries the contribution of mining to the GDP hovers around 15-25 per cent, but Nigeria’s contribution is less one per cent, adding the trajectory of the poor performance must be written to the benefit of both states and federal government.
Mohammed said the Federal Government initiated a funding scheme for artisanal miners through the Bank of Industry (BoI), but only one miner has been able to access the fund, hence the need to simplify the process to enable others to benefit.Stating that insecurity, regulatory issues, infrastructure and multiple taxes continue to affect the sector; Mohammed said inadequate geological data post critical challenge to mining investment decisions.
From his perspective, Jayeola, said sustaining current efforts will go a long way to make the country achieve desired results in the sector, and urged government to speed up efforts in the formalisation of artisanal miners. He said: “Artisanal miners are 80 per cent of the mining population therefore formalising them will be value to them and the government.”