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FG moves to recover N17bn mineral export unpaid royalties

Ebuka Daniel

The Federal Government has expressed willingness to recover over N17bn unpaid royalties from mineral exports.

The government also stated that measures are being put in place to block revenue leakages as well as
remove undue bottlenecks experienced in the process of transactions by both exporters of minerals and government regulatory agencies.

Between 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 and Steel Development and acknowledged to have paid royalties according to documents from the Nigeria Customs Service.

During this period unpaid royalties amounted to N17,12bn, which are still outstanding to the Federal Government.

The Minister of Mines and Steel Development, Olamilekan Adegbite said these in Abuja at a stakeholders’ consultative forum on the Draft Minerals Export Exports Guidelines, Procedures and Documentation requirements.

The event was attended by the Minister of Budget and National Planning Mrs Zainab Ahmed, the Permanent Secretary Special Duties Aliyu Shinkafi and other stakeholders in the solid minerals sector of the economy.

He said the absence of a handbook for standardized solid minerals export has also led to a situation where prices in the local mineral market are almost at par with international price benchmarks.

This, he stated, had impeded ease of business for genuine exporters, as attaining reasonable margins had become practically impossible.

The Minister said local prices are high because most of the exports are carried out for money laundering purposes, where profit margins are not the necessary incentives.

He said the one of the objectives of the guidelines is to ensure due process in exports that will promote ease of doing business across borders.

In coming up with the guidelines, the Minister said the government considered the major participants in the process and discovered the missing link to be the lack of an effective pre-shipment inspection platform, to interface between government and the exporter in respect to quantity, quality and price.

Adegbite explained further that while prices of other commodities may vary greatly with different traders and manufacturers, the mineral sector (liquid or solid) is controlled by international price indices that guide trading.

According to him, the sector is also guided by stringent laws that warrant the determination of the source of the mineral before it is traded internationally.

This, he stated, is in a bid to stem money laundering, trafficking, child labour and conflict of minerals flooding the international market.

He noted that these issues have appropriately been addressed in the guidelines.

In her speech at the event, the Finance Minister said that in order to harness the potentials of the solid minerals sector, the government constantly articulates policies and develop guidelines aimed at maximizing the sector’s contribution to the nation’s Gross Domestic Product.

She explained that the need to improve procedures, documentation and regulations in the solid mineral 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.

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

She said, “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 government from the export, ensure the integrity of data and determine the possible mineral derivation to their States of Origin.”

She said based on her preliminary review of the draft Mineral Exports Guidelines, Procedures and Documentation Requirement which has been circulated to stakeholders and would be presented at the meeting, the document has been designed to minimize revenue leakages.

“It is envisaged that developing a more regulated mineral sector would obviously create conducive environment that would significantly enhance mining business in Nigeria.

“It is also important to state that Section 22 and 23 of the Pre-shipment Inspection Export Acts No. 10 of 1996 empowers the Honourable Minister of Finance, as the Chairman of the Nigerian Export Supervision Scheme to issue directive and guidelines as may be required for discharging the objective of the Act.

The Act requires that no goods shall be exported from Nigeria except an inspecting Agent appointed by Government has issued in respect of the goods a Clean Certificate of Inspection,” she added.

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