NEITI calls for urgent reforms of Solid minerals sector task the Senate new legislation

By Michael Agbaji 

The Nigeria Extractive Industries Transparency Initiative -NEITI has called for urgent and comprehensive reform of the Nigerian solid minerals sector.

The Executive Secretary of NEITI, Dr. Orji Ogbonnaya Orji renewed the call while interacting with the Senate Committee on Public Accounts – SPAC on its industry reports for the oil, gas and mining sectors covering years 2021, 2022 and 2023. 

Presenting the reports, Dr. Orji lamented the abysmal performance of the sector which he says does not mirror the vast mineral deposits in Nigeria and the potentials that the sector holds for the economy.

The Executive Secretary remarked “The Solid Minerals industry contributing less than one percent to the GDP, needs urgent help, intervention and progressive legislation that would attract investors.

According to him,NEITI works with the ministry and we know what the challenges are, they also need support. The data we presented reflects the current situation and activities in the sector, but that is not in any way near the potential of the sector”.

He added that the information and data provided by NEITI is put in the public domain with the expectation that “Policy makers and the legislature will use the information to initiate the comprehensive reforms needed in the sector”, he emphasised. 

On the oil and gas industry reports, Dr. Orji Ogbonnaya Orji pointed out that Nigeria recorded some positive milestones in the 2023 report. 

According to Dr. Orji, “One of the significant progresses recorded in the oil and gas sector in 2023, is the drop in crude oil losses by 78%. The NEITI report showed that Nigeria lost 36.6 million barrels of crude oil in 2022 while 2023 records indicated a significant drop to 7.68 million barrels”. 

Dr. Orji commended the Office of the National Security Adviser, the Armed Forces and Security Agencies for coordinated policies that deterred crude theft such as better surveillance of the nation’s pipelines etc. The transparency Boss also recommended, “The ownership and buy-in of the host communities in order to curb crude oil theft”.

 He underscored the dangers of indiscriminate laying off of skilled workers, who for lack of what to do and their level of technical know-how, engage in the vandalism of oil and gas infrastructure to survive.

Another positive indicator in the oil and gas report is the fall on importation figures. Fuel imports declined by 3.5billion litres, from the 23.54 billion litres recorded in 2022 to 20. 28billion litres in 2023. This was attributed to the removal of subsidy. 

The NEITI reports however, revealed a decline in revenues from the sector by 13.7% between 2022 and 2023.

 “The oil and gas sector recorded a total revenue of $35.78 billion in 2022, but dropped to $30.86 billion in 2023. The NEITI report also showed that Nigeria earned a total of $831.14 billion between 1999 – 2023 (25yrs)”, Dr. Orji stated.

Similarly, the NEITI reports also showed that the sector’s contribution to Nigeria’s GDP consistently declined for the three years under review. It presented the figures of 7.24% for 2021, 5.74% for 2022 and 5.48% for 2023 respectively.

On the same trajectory, gas production also declined during the period from 2.47 Billion scf in 2021, to 2.52 billion scf in 2022 and lower to 2.49 billion scf in 2023. Dr. Orji called for clear alignment between Nigeria’s gas commercialisation and energy transition policies and the Climate Change Act to accelerate the country’s journey to affordable, clean and renewable energy.

The NEITI report also revealed a total sum of $6.1 billion as outstanding liabilities owned by the Oil and Gas Industry to the federation as at August 2024. These are made up of outstanding royalties, taxes, rents and other collectible revenues due to be collected into government coffers. “At a time when the country is mobilising resources to meets its budget expenditures, recovering these revenues by the relevant agencies will be a huge relief to the government”, Dr. Orji enthused.

The above revelations generated a lot of debates and comments from the Senators. The Executive Secretary applauded the interest and ensuing discussions, stating that “This is the whole essence of the EITI globally”. 

Chairman of the Senate Committee on Public Accounts, Senator Aliyu Wadada stated that the Committee will hold a public hearing which will be driven by the NEITI industry reports. He emphasised that all companies with outstanding liabilities to the federal government must appear before the Committee during the proposed hearing.

Senator Wadada lamented the poor performance and contribution of the solid minerals sector to the economy especially with the recorded remittances which does not reflect the potentials of the sector nor the quantum of activities and revenue that the sector is generating and can generate for the Nigerian economy.

According to Senator Wadada “This is quite ridiculous and unacceptable. It cannot continue. Nigeria needs a profitable solid minerals sector”

Sen. Osita Izunaso (Imo West) asked NEITI if it is comfortable with the way the PIA was being implemented.

Responding, the Executive Secretary remarked that the concern of NEITI was that the PIA was being implemented without a coordinated plan or a strategy. 

He recalled that an implementation plan was set up immediately the PIA was enacted and that Committee – the Petroleum Industry Act Steering Committee- PIASTEERCO did not conclude its assignment and did not submit any report, therefore, making it impossible for the new administration to have a plan to work on. 

The Executive Secretary called for a revisit and the constitution of a new team comprising multi stakeholder group to develop a strategic plan to guide the implementation of the PIA because of the importance of the law.

Sen. Dafinone (Delta Central) in his intervention, welcomed NEITI’s interest in data and requested explanation on the fluctuation in terms of production and its correlation with oil theft. 

The Executive Secretary explained that although oil theft was gradually decreasing, recording a 78% decrease in the 2023 report, the need to sustain the ongoing onslaught against oil theft should be sustained. 

He commended the Office of the National Security Adviser and other security agencies for the job done so far and called for more coordination and exchange of information.

Sen. Abdul Ningi (Bauchi Central) requested NEITI’s update on the status of remittances to the Federation account based on the liabilities disclosed by NEITI report.

 The NEITI Executive Secretary explained that the liabilities were collectable revenues due to the FIRS for taxes and to the NUPRC for royalties, rents among others.

He explained that NEITI is working with the EFCC and the two respective agencies to recover all collectible revenues in the industry and remit to the appropriate bodies.

Senator Victor Umeh (Anambra Central) focused his questions on the less than 1% revenue performance of the solid minerals sector and requested to know the level of collaboration between NEITI and the Ministry of Solid Minerals Development and what needs to be done to revitalize the sector. 

Responding, Dr. Orji explained that the solid minerals sector and the Ministry need help. 

He welcomed the passion of the current Minister to reposition the sector but underlined that NEITI’s position remains a comprehensive reform on the sector based on the Executive Bill before the National Assembly such bill, Dr. Orji explained should review the 2007 solid minerals act with emphasis on establishing a dynamic physical regime for the sector and possibly the national company to drive investment efforts in the sector among other measures. He agreed with the Senators that the performance of the sector was far beyond expectation. 

The Committee requested NEITI to furnish it with the detailed payments and volumes of minerals mined from the companies operating in the solid minerals sector. It described the sector as needing a surgical operation and advocated for a private sector led development of the Nigerian solid minerals sector”.

The Committee also discussed the challenges faced by NEITI in the discharge of its mandate and committed to collaborate and partner with the transparency agency to implement the recommendations of its reports findings.

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