Unpaid Minerals Export Royalties to Federation Account hit N17.12bn

The Federal government has said that outstanding unpaid royalties from Minerals export between 2013 and 2017 to the Federation Account amounted to N17.12billion.
The Minister of Mines and Steel Development, Olamilekan Adegbite disclosed this during the consultative forum on draft mineral export guidelines procedure and documentation requirements in Abuja.
He said although Nigeria recorded a total of 2,670 mineral exports between January 2013 and June 2017, the said royalties were paid on only 56 issued Mineral Export Permits by the Federal Ministry of Mines & Steel Development, adding that the development was because there was no drafts standard minerals export guidelines and procedures.
According to him, the process to establish the export guidelines for the country began on October 28, 2017 with presentations at a consultative and sensitization workshops for the revised non–oil export guidelines in Abuja and Lagos.
He noted that as part of efforts to remove uncertainty and cut down on the current commodities export cycle to only 26 working days, the Federal Government is proposing a draft standard guidelines for minerals exports for the country.
He said the processing of exit point documentation and shipment processes would take between three to five working days respectively when operational, as desired by the Presidential Enabling Business Environment Council (PEBEC).
Apart from uncertainty and delays in completing commodities export protocols, the Minister said the absence of a handbook for standardized solid minerals export in the country made it difficult to determine commodities prices in the local mineral market where they are almost at par with international price benchmarks.
This, he said, impeded ease of business for genuine exporters, as attaining reasonable margins become impossible.
Local commodities prices, he noted, are often high, because most of the export activities were carried out for money laundering purposes, where profit margins were not the necessary incentives.
Although the guidelines did not address the peculiarity of the country’s mineral exports, the Minister said the Ministry made a proposal that was adopted for consideration by stakeholders, for specific guidelines for solid minerals export in the country.
The guidelines were scrutinized by the Extractive Hub through the Adam Smith Consultants and compared with over 20 export guidelines from mineral exporting countries worldwide.
The final draft was sent to the Federal Ministry of Finance, Budget and National Planning for ratification and approval in 2018.
A committee comprising representatives of the Federal Ministries of Finance and Mines and Steel was constituted to organise the consultative forum, which later submitted a technical Report for implementation.
The outcome of the consultative forum was subjected to further scrutiny by the PEBEC, to ensure the provisions met the Trade Across Borders indicators required, and capable of promoting ease of doing business across borders.
Despite stiff resistance, the Minister said the committee appraised the issues and developed the guidelines that focused primarily on promoting due process in exports and ease of doing business across borders.
He identified the major participants in the process to include exporters, independent pre–shipment agents and government agencies.
At the end, he said the committee discovered the missing link to be the lack of an effective pre-shipment inspection platform, to interface between government and the exporter on quantity, quality and commodity prices.
“We must note 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.
“It is also guided by stringent laws that warrant the determination of the source of the mineral before it is traded internationally.
“All in a bid to stem money laundering, trafficking, child labour and conflict mineral flooding the international market. These issues we have appropriately addressed in the guidelines,” he said.
The new guideline are divided into five segments, with 11 steps documentation and source, pre-Shipment inspection exit point documentation shipment and sanctions.
“The introduction of electronic processing by the pre-Shipment Inspection Agent (PIA) remains the bedrock of the system.
“It will ensure transparency in the determination of quality, quantity and price. It will also facilitate the speedy granting of the Mineral Export Permits and reduce contact of the miner with the Ministry of Mines and Steel Development.
The PIAs, the Minister said, are appointed to enhance border agency coordination in facilitating legitimate trade and remove bottlenecks experienced by mineral exporters.
The criteria for the selection of a PIA include having presence in at least 250 locations globally providing weighing bridges at the seaport and land boarders; providing laboratory services in Nigeria for both X-ray fluorescence (XRF) and detailed Atomic Absorption (AAS) assays.
The criteria also include providing metal scanners and XRF assay facilities at the airports and land borders and capacity to deploy Radio Frequency Identification (RFID) services for track and trace of all inspected mineral consignments.
In the case of solid minerals exports, certification is carried out at source by the Federal Mines Officers (FMOs) and, a State Certificate of Origin (SCoO) issued in line with provisions of Section 143 of the Nigerian Mineral and Mining Act 2007.