High Royalties on Gold Impede Nigeria's Mining Prospects

SEATTLE (Scrap Monster): The Federal Government of Nigeria has been urged to reduce high royalties on gold and other minerals. The plea was made by Alhaji Sani Shehu, the former President, Miners Association of Nigeria (MAN) during an exclusive interview with the News Agency of Nigeria on Sunday. He requested the administration to take immediate steps to reduce gold royalty.

According to Shehu, gold has not earned enough revenue for the Federal Government despite huge availability of gold in the country. The high royalty on gold has forced gold merchants to bypass the official route, in order to escape from royalty payment. Instead, the gold produced locally is exported out of the country through illegal routes. The merchants argue that payment of hefty royalty impacts their business and profits. A moderate reduction in royalty is likely to boost legal gold trade, which in turn will contribute to federal revenues, Shehu noted.

Surprisingly, the country imports gold from neighboring countries such as Ghana, Niger, Burkina Faso and Algeria.

He alleged that the government mechanisms to monitor the inflow and outflow of gold have become highly inefficient due to lack of adequate personnel and equipment. The Federal Government needs to deploy more personnel to strengthen the monitoring process. Further, the government should focus on investing in state-of-the-art mining equipment and techniques to get the best out of its massive gold deposits.