Fiscal instability, multiple taxes hampers solid minerals investments -NEITI

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(Last Updated On: 2017-05-18)

 

Nahimah Ajikanle Nurudeen
Nigeria Extractive Industries Transparency Initiative, (NEITI) has listed Fiscal instability and multiple taxes as major impediments against investments in the Nigerian solid minerals business.

The Executive Secretary of NEITI , Waziri Adio stated this at the just concluded First Northern Nigeria Solid Minerals Fair and Workshop in Kaduna.

According to him, exploration of Nigeria’s solid minerals for successful integration to diversify the economy will not attract requisite foreign investment except commitments were made by government to check fiscal instability, multiple taxation and outrageous demands by host communities.

Waziri who was represented by Engr. Ahmed Bassi, presented a paper on ‘Transparency and Accountability in Improving Performance in the Solid Minerals Sector’.

He said there is an urgent need for government to curb these impediments as well as provide an enabling environment to attract solid minerals investment.

“The solid minerals sector is supposed to be one of the focal point for national development but we need to provide an incentive for enabling environment for people to come and invest in this sector.

“Two things are working against this; one is that of inadequate geographical data. As stakeholders we need to ask this critical question, what about the multiplicity of taxes?

“We know that royalty payment are only paid to the federal government but you receive payment for so many things. State governments come with arbitrary fees, we know there are charges as fees paid for road maintenance for instance. But when you produce limestone of gemstone, local government collect it’s share, state government demand their own and the host communities come with 101 demands. Does it make business viable for any investor to come and invest? I don’t think so.”

Adio advocated a compact data regime where investors have access to unified information on licensing, operations and taxes.

The NEITI Executive Secretary said fiscal stability in the solid mineral sector would be necessary security as motivation for investment and investors in the sector.

“For you to get into mining, you must obtain bank loans. You can’t make projection because tomorrow, the state or the federal government might enact laws that they’re taxing you again for this or that.

“Why are the big mining companies are not here but in Ghana? It’s because of stability. One of the things we must take away from here is that we need fiscal stability in our solid minerals sector.”

He lamented that less than 0.1 per cent of Gross Domestic Product was derived from the sector in 2016 and wondered why in 2014, Nigeria’s export from the non-oil sector was merely 4 per cent, including solid minerals.

“Analysis of production done by states showed that Ogun, Kogi and Cross states top minerals exploration while the top rich ones with huge deposits, for instance, Nasarawa came far behind based on records available on payment to government from the sector,” Adio said.

Also, the Director-General of Raw Materials Research and Development Council, Dr. Hassan Doko Ibrahim, disclosed that as at 2015, more than 4000 mineral titles were granted, two-third of them were issued to operators in Northern Nigeria.

Represented by the Director, Department of Industrial Chemical and Minerals, Dr. Moses Omojola; he bemoaned the attitude of Nigerians selling titles to investors for immediate financial benefits.

According to Omojola, Nigeria spends N2.5 billion yearly importing hydrated lime, he urged the states to discourage imports by adding value to the products for end users.

In addition, he said government should strengthen security and surveillance at mineral regions to check smuggling of precious stones and metals.

He advocated the need for the establishment of a specialised bank with not more than three (3) per cent interest rate accessible to investors and urged government to pay attention to equipment leasing, maintenance of mining sites and mineral buying centres.

He also expressed concern on the need for land reclamation to stem environmental degradation.

Meanwhile, Sokoto State Commissioner of Solid Minerals and Natural Resources Development, Hon. (Barr.) Bello Muhammad expressed support for the establishment of the Solid Mineral Bank.

He disclosed that a Bill, sponsored by Senator Tijani Kaura from Zamfara was before the National Assembly in that regards and suggested that part of the 13 per cent Derivation Fund be devoted to developing the sector.

Mohammad cautioned states against imposing tax burdens on miners in the guise of revenue drive.

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