Abuja – The Nigeria Extractive Industries Transparency Initiative (NEITI) has renewed its call for urgent and comprehensive reforms in the country’s solid minerals sector, emphasizing the need for new legislation to revitalize the industry.
NEITI’s Executive Secretary, Dr. Orji Ogbonnaya Orji, made the appeal while engaging with the Senate Committee on Public Accounts (SPAC) on NEITI’s industry reports covering oil, gas, and mining sectors for the years 2021, 2022, and 2023.
Presenting the reports, Dr. Orji lamented the sector’s dismal performance, stating that its contribution to GDP—less than 1%—does not reflect Nigeria’s vast mineral deposits and economic potential.
“The solid minerals industry needs urgent intervention and progressive legislation to attract investors,” he stated.
He further emphasized that while NEITI works closely with the Ministry of Solid Minerals Development, there are significant challenges requiring strong policy support.
“The data we presented reflects the sector’s current state, but it is far from its full potential,” he added.
Oil and Gas Industry: Progress and Challenges
Dr. Orji highlighted key insights from NEITI’s 2023 oil and gas report, noting a 78% decline in crude oil losses:
2022: 36.6 million barrels lost
2023: 7.68 million barrels lost
He attributed this progress to better surveillance, improved security coordination, and stricter policies by the National Security Adviser’s Office and security agencies. However, he stressed the need for continued vigilance and greater involvement of host communities in combating oil theft.
NEITI’s report also revealed a decline in fuel imports, largely due to the removal of fuel subsidies:
2022: 23.54 billion litres imported
2023: 20.28 billion litres imported
Despite these improvements, total oil and gas revenue dropped by 13.7%, from $35.78 billion in 2022 to $30.86 billion in 2023. NEITI further reported that Nigeria earned $831.14 billion from the sector over the past 25 years (1999–2023).
Additionally, the sector’s contribution to GDP has steadily declined:
2021: 7.24%
2022: 5.74%
2023: 5.48%
Gas production also fluctuated, falling from 2.52 billion scf in 2022 to 2.49 billion scf in 2023. Dr. Orji urged better alignment between Nigeria’s gas commercialization policies, energy transition goals, and the Climate Change Act to accelerate the shift to clean energy.
$6.1 Billion in Outstanding Oil and Gas Liabilities
NEITI’s report disclosed $6.1 billion in outstanding payments owed by oil and gas companies as of August 2024, including unpaid royalties, taxes, and rents.
Dr. Orji stressed the urgency of recovering these funds, stating:
“At a time when Nigeria is mobilizing resources to meet budgetary needs, these revenues—if recovered—would provide significant relief.”
Senate Reactions and Next Steps
NEITI’s findings sparked intense discussions among senators.
Senate Public Accounts Committee Chairman, Senator Aliyu Wadada, announced plans for a public hearing based on NEITI’s reports, stating that all defaulting companies must appear before the Committee.
“The poor performance of the solid minerals sector is unacceptable. This sector has the potential to generate substantial revenue for Nigeria,” Senator Wadada remarked.
Other Senator’s echoed similar concerns:
Senator Osita Izunaso (Imo West) questioned whether NEITI was satisfied with the implementation of the Petroleum Industry Act (PIA).
Dr. Orji responded, stating that the PIA’s implementation lacks a strategic plan, as the PIA Steering Committee (PIASTEERCO) failed to complete its assignment. He urged the government to reconstitute a multi-stakeholder team to develop a clear implementation roadmap.
Senator Dafinone (Delta Central) inquired about fluctuations in oil production and their link to crude theft.
Dr. Orji acknowledged that theft had declined significantly but emphasized the need for continued security efforts and intelligence-sharing.
Senator Abdul Ningi (Bauchi Central) sought an update on revenue remittances, prompting Dr. Orji to explain that NEITI is collaborating with the EFCC, FIRS, and NUPRC to recover all outstanding payments.
Senator Victor Umeh (Anambra Central) criticized the solid minerals sector’s underperformance, questioning the level of NEITI’s collaboration with the Ministry of Solid Minerals Development.
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Dr. Orji reiterated that while the current minister is committed to reforming the sector, a comprehensive legislative overhaul is necessary. He urged the National Assembly to expedite the passage of an executive bill revising the 2007 Solid Minerals Act.
“We need a new fiscal regime and possibly a national company to drive investment in the solid minerals sector,” he said.
Call for Private Sector-Led Growth
The Senate Committee has directed NEITI to provide a detailed breakdown of solid minerals production volumes and payments made by mining companies.
Describing the sector as in need of a “surgical operation,” the Committee advocated for a private sector-driven approach to unlocking Nigeria’s vast solid minerals potential.
The committee also pledged to support NEITI in implementing its recommendations and overcoming challenges in fulfilling its transparency mandate.
