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‘Nigeria Earned N69.2bn from Solid Minerals in One Year’

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Kayode Fayemi
  • ‘Nigeria Earned N69.2bn from Solid Minerals in One Year’

Nigeria earned N69.2bn from solid minerals in 2015, representing an increase of 24 per cent on the N55.8bn generated from the sector in 2014, the Nigeria Extractive Industries Transparency Initiative announced on Sunday.

In its latest independent audit report, NEITI stated that the total production of solid minerals in the country stood at 39.27 million tonnes in 2015, representing a reduction of 17 per cent from the 47.1 million tonnes produced a year earlier.

It said the drop in the 2015 production figure was attributable to insecurity in parts of the country and more stringent approval process for explosives used in mining.

The report indicated that while the mineral production reduced, government’s revenues went up in the same year.

“This increase in revenue was due to the growth in taxes collected from the sector and review of royalty rates paid by companies, which came into effect within the year under review,” the report stated.

NElTl’s previous solid minerals audit reports had recommended an upward review of Nigeria’s royalty rates to align with the current industry realities.

The report also indicated that the value of solid minerals’ exports in 2015 stood at $9.733m, which was 1.45 per cent of the non-oil exports for the year.

Lead and zinc topped the chart with 79 per cent, valued at $7.7m; while 175 ounces of gold, valued at only $122,000, were exported during the period.

It stated that the solid minerals sector contributed 0.12 per cent to the country’s Gross Domestic Product in 2015, a marginal increase of 0.01 per cent on the 0.11 per cent contributed by the sector in 2014.

“This report shows evidence that the contribution of the solid minerals sector to government revenues and macro-economic indicators is beginning to improve, even if marginally,” the Executive Secretary, NEITI, Waziri Adio, said.

The report highlighted the specific contributions by companies and states to the sector’s revenue growth and development.

Cement manufacturing companies were the major revenue contributors to the sector, accounting for over 60 per cent; while construction companies and real mining companies contributed about 31 per cent and eight per cent, respectively.

The report stated that three states, Ogun, Kogi and Cross River, and the Federal Capital Territory accounted for about 70 per cent of the production volumes in 2015, with Ogun State topping the table with 36 per cent.

According to the report, a total of 4,305 mineral titles were valid in 2015. Of this figure, 204 titles were mining leases; 657 were for small-scale mining; 1,865 for quarrying licences, while exploration licences accounted for the remaining 1,579.

It noted that 1,220 of the 4,305 mining titles were issued in 2015 alone.

The agency also stated that the NEITI 2015 oil and gas report would be released next month.

The solid minerals audit report recognised the progress being made by the government towards repositioning the sector to be a major driver of the economic and revenue diversification agenda of the present administration.

To sustain this growth and further enhance the capacity of the sector to contribute to the economy, the report called for the speedy release of the N30bn Solid Minerals Development Fund recently approved by the Federal Executive Council to the intended beneficiaries in order to support some of the activities already stipulated in the road map for the sector.

The report suggested that a ban should be placed on the importation of some minerals such as gypsum, barite and kaolin, which Nigeria had in good quality and quantity.

NEITI stated that its first intervention in the solid minerals sector began with the conduct of a study in 2011, followed by an independent audit of the sector in 2012, which covered 2007-2010.

The six cycles of audit so far conducted by NEITI in the sector show that Nigeria earned a total of N271.77bn between 2007 and 2015.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

Electricity Consumers Get 611,231 Meters Under MAP Scheme

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power project

Electricity Consumers Get 611,231 Meters Under MAP Scheme

A total of 611,231 meters have been deployed as at January 31, 2021 under the Meter Asset Provider initiative since its full operation despite the COVID-19 pandemic and other extraneous factors, the Nigerian Electricity Regulatory Commission has said.

NERC disclosed this in a consultation paper on the review of the MAP Regulations.

The proposed review of the MAP scheme is coming nearly four months after the Federal Government launched a new initiative called National Mass Metering Programme aimed at distributing six million meters to consumers free of charge.

“The existence of a huge metering gap and the need to ensure successful implementation of the MYTO 2020 Service-Based Tariff resulted in the approval of the NMMP, a policy of the Federal Government anchored on the provision of long-term low interest financing to the Discos,” NERC said.

The commission had in March 2018 approved the MAP Regulations with the aim of fast-tracking the closure of the metering gap in the sector through the engagement of third-party investors (called meter asset providers) for the financing, procurement, supply, installation and maintenance of meters.

It set a target of providing meters to all customers within three years, and directed the Discos and the approved MAPs to commence the rollout of meters not later than May 1, 2019.

But in February 2020, NERC said several constraints, including changes in fiscal policy and the limited availability of long-term funding, had led to limited success in meter rollout.

NERC, in the consultation paper, highlighted three proposed options for metering implementation going forward.

The first option is to allow the implementation of both the NMMP and MAP metering frameworks to run concurrently; the second is to continue with the current MAP framework with meters procured under the NMMP supplied only through MAPs (by being off-takers from the local manufacturers/assemblers).

The third option is to wind down the MAP framework and allow the Discos to procure meters directly from local manufacturers/assemblers (or as procured by the World Bank), and enter into new contracts for the installation and maintenance of such meters.

“Customers who choose not to wait to receive meters based on the deployment schedule of the NMMP shall continue to have the option of making upfront payments for meters which will be installed within a maximum period of 10 working days,” NERC said.

The regulator said such customers would be refunded by the Discos through energy credits, adding that there would be no option for meter acquisition through the payment of a monthly meter service charge.

“Where meters have already been deployed under the meter service charge option, Discos shall make one-off repayment to affected customers and associated MAPs. Such meters shall be recognised in the rate base of the Discos,” it added.

NERC urged stakeholders to provide comments, objections, and representations on the proposed amendments within 21 days of the publication of the consultation paper.

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Economy

Nigeria’s Economy Moving in Right Direction but Slow – Amina Mohammed

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Banana Island

Nigeria’s Economy Moving in Right Direction but Slow – Amina Mohammed

Nigeria is moving in the right direction economically but its movement is not fast, the United Nations stated on Thursday.

Deputy Secretary-General of the United Nations, Amina Mohammed, said this during a meeting at the headquarters of the Federal Ministry of Industry, Trade and Investment in Abuja.

She said the challenges in Nigeria were huge, its population large but described the country’s economy as great with lots of opportunities.

The UN scribe stated that after traveling by train and through various roads in the Northern parts of Nigeria, she discovered that the roads were motorable, although there were ongoing repairs on some of them.

Mohammed said, “This is a country that is diverse in nature, ethnicity, religious backgrounds and opportunities. But these are its strengths, not weaknesses.

“And I think the narrative for Nigeria has to change to one that is very much the reality.”

Speaking on her trips across parts of Nigeria, she said, “What I saw along the way is really a country that is growing, that is moving in the right direction economically. Is it fast enough? No. Is it in the right direction? Yes it is.

“And the challenges still remain with security, our social cohesion and social contract between government and the people. But I know that people are working on these issues.”

She said the UN recognised the reforms in Nigeria and other nations, adding that the common global agenda was the Sustainable Development Goals.

Mohammad commended Nigeria’s quick response to the COVID-19 pandemic, as she expressed hope that the arrival of vaccines would be the beginning of the end of COVID-19.

On his part, the Minister of Industry, Trade and Investment, Adeniyi Adebayo, told his guest that the Federal Government was working hard to make Nigeria the entrepreneurial hub of Africa.

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Economy

N10.7tn Spent on Fuel Subsidy in 10 Years – MOMAN

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petrol Oil

N10.7tn Spent on Fuel Subsidy in 10 Years – MOMAN

Nigeria spent a total of N10.7tn on fuel subsidy in the last 10 years, the Chairman, Major Oil Marketers Association of Nigeria, Mr Adetunji Oyebanji, has said.

Oyebanji, who was the guest speaker at the 18th Aret Adams Lecture on Thursday, said N750bn was spent on subsidy in 2019.

He highlighted the need for a transition to a market-driven environment through policy-backed legislative and commercial frameworks, enabling the sustainability of the downstream petroleum sector.

“Total deregulation is more than just the removal of price subsidies; it is aimed at improving business operations, increasing the investments in the oil and gas sector value chain, resulting in the growth in the nation’s downstream petroleum sector as a whole,” he said.

The managing director of 11 Plc (formerly Mobil Oil Nigeria Plc) said steps had been taken, “but larger and faster leaps are now required.”

According to him, deregulation requires the creation of a competitive market environment, and will guarantee the supply of products at commercial and market prices.

“It requires unrestricted and profitable investments in infrastructure, earning reasonable returns to investors. It requires a strong regulator to enable transparency and fair competition among players, and not to regulate prices,” Oyebanji said.

He noted that MOMAN had recently called for a national debate by stakeholders to share pragmatic and realistic initiatives to ease the impact of the subsidy removal on society – especially on the most vulnerable.

He said, “A shift from crude oil production to crude oil full value realisation through deliberate investment in domestic refining and refined products distribution, creates the opportunity to transform the dynamics of the downstream sector from one of ‘net importer’ to one of ‘net exporter’, spurring the growth of the Nigerian economy.

“Effective reforms and regulations are key drivers for the growth within the refining sector. Non-functional refineries cost Nigeria over $13bn in 2019. If the NNPC refineries were operating at optimal capacity, Nigeria would have imported only 40 per cent of what it consumed in 2019.”

Full deregulation of the downstream sector remains the most glaring boost to potential investors in this space, according to Oyebanji.

He said, “As crude oil prices will fluctuate depending on the prevailing exchange rates, it will be astute to trade in naira to avoid inevitable price swings.

“There needs to be a balance between ensuring the sustainable growth of the crude oil value chain (upstream through downstream) and providing value for the Nigerian consumer and the Nigerian economy.”

He said the philosophy should be for the government to put the legislative and commercial framework in place and let the market develop by itself.

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