The Nigeria Extractive Industries Transparency Initiative (NEITI) has opened up on how foreign companies operating in the country’s mining sector undercut the government through underpaying royalties and not remitting taxes.
The Director, Technical, NEITI, Dr. Dieter Bassi, who stated this at the public presentation of the 2019 Oil, Gas and Solid Minerals audit reports to the media and Civil Society Organisations in Lagos, said the companies also overstretched their exploration licenses.
According to him, under the mining law, operators with exploration licenses are not supposed to engage in mining as many companies are taking advantage of the unregulated mining industry.
“The major operators are unregulated and to trace these companies is quite difficult and some of the companies are operated by foreigners. Getting the report on this sector ready was quite difficult,” he added.
Bassi further revealed that many companies in the sector have multiple Tax Identification Numbers (TINs), which suggest that they are not good corporate citizens and are not remitting taxes to the Federal Government.
“We also found out that many companies were operating under different licenses. Companies with exploration licenses are not supposed to mine but we find companies that have overstretched their exploration licenses and have been mining and it means they are not remitting to the government’s purse,” he added.
Also speaking at the event, the Executive Secretary, NEITI, Dr. Orji Ogbonnaya Orji, reiterated the need for Nigeria to learn how to manage its natural resources effectively and efficiently in its quest to eradicate poverty.
The NEITI boss said the agency has conducted 12 cycles of audits in the oil and gas sector covering the periods 1999-2019 and has also conducted the first mineral sector audit from 2007-2010.
He added that NEITI has also conducted two cycles of audits that focus on the allocation, statutory disbursements and utilisation of revenues from the federation account to the three tiers of government.
“I am optimistic that if the contents of these reports are reviewed by various stakeholder groups of NEITI and the recommendations implemented by the covered entities concerned, Nigeria’s oil and gas industry will witness massive investments, with revenues from the sector maximised to uplift the standards of living of the citizens,” he said.
The Assistant Director, Oil and Gas, NEITI, Mr. George Abiye, while delivering the oil and gas report, said from the total 735.661mmbbls crude oil lifted, companies lifted 469.01mmbbls. He stressed that the remaining 266.65mmbbls was lifted by Nigerian National Petroleum Corporation (NNPC) valued at $17.441 billion.
He noted that of the $17.441 billion, $2.757 billion was sale receivables while the remaining balance of $14.684 billion was cash receipt from 2019 sales.
Abiye said that in addition to the cash receipts, a total of $3.518 billion accrued as receipts from sales proceeds from federation equity crude, profit oil and in-kind payments.
“The $3.518 billion is made up of $1.249 billion undistributed balance from 2018 and $2.268 billion prior year receivables. A total of $18.202 billion was the aggregate cash receipts for 2019,” he said.
