Since the Osun State Governor, Senator Ademola Adeleke announced his administration’s resolve to recover deserved earnings of the state from its solid mineral assets, there has been an undisguised, deceitful effort to colour the good intention of the new government with misleading rhetorics and false interpretation. Those who appeared averse to probity have employed diversionary tactics to sway attention away from the valid questions raised by Adeleke in his speech at the inauguration of the solid mineral committee on Monday.
What did Adeleke say? “Osun State according to extant laws is entitled to 13 percent derivation from every ounce of gold and other solid minerals,” he noted in his speech, and later went ahead to declare that “denying Osun State of its Legitimate Revenue through the refusal to pay derivation, and polluting our environment with impunity will not continue under my watch.”
The question that now arose from the above is whether Osun state is truly entitled to a 13 per cent derivation from solid minerals explored from the state. The answer is in the affirmative. The confusion of the Governor’s critics is however from the source of the derivation, which they have erroneously assumed to be from taxes.
While announcing the preparedness of the Federal Government to pay states with active solid minerals exploration 13 per cent derivation as is the case in the oil sector, the the Minister of Mines and Steel Development, Olamilekan Adegbite said “Therefore, if we get royalty for gold from Osun State for instance, before it is distributed into the general purse, Osun will get 13 per cent first.” This clearly explains that the 13 per cent derivation being referred to by Governor Adeleke is to come from royalty and not taxes as critics had ignorantly projected.
According to English Learner Dictionary, royalty is “the payment received by an owner of real property for exploration of mineral rights on the property.” This clearly defers from tax, which according to the same dictionary, is “money paid to the government other than for transaction-specific goods and services.”
While it is correct that the Nigerian Minerals and Mining Act (NMMA) provides a tax holiday of the first three years of operation to mining companies, which may be extended for a further two years, this is not the same as a royalty payment. Section 99(1) of the Nigerian Minerals and Mining Regulations 2011 provides that “A mineral titleholder, other than the holder of Reconnaissance Permit (RP) or water use permit, shall pay royalty as prescribed in the appropriate schedule to these regulations.”
This payment ranges between 3-5 per cent depending on the type of mineral and the only exception is through a waiver by the FG. However, it is subject to approval by the Federal Executive Council for payment deferment. Nothing so far suggested that such was granted to Segilola, hence, those trying to fault the position of Adeleke missed it big time.
And again, of all the incentives provided for mining companies under the Nigerian Minerals and Mining Act (NMMA) 2007, nowhere is royalty payment considered. The only condition for waiver of royalty payment by the Minister is for any mineral exported sorely for the purpose of analysis or experiment or scientific specimen. And we all know that Segilola and the various mining companies in Osun state didn’t fall into this category, making the excuse of tax holiday clear ignorance of the issue raised by Adeleke.
The intention of Governor Adeleke is clear and noble. Only those who have anything to hide will go to the extent of mischievously twisting his message for something entirely different from what he sets out. It goes to show that some people are comfortable with the obvious shortchanging of Osun people, and will want the practice to continue.
If Osun state has not been getting what it is entitled to, what is the fuss about the Governor probing what could have happened and ensuring recovery of the lost revenue? Just recently, the Federal Government paid billions of naira to oil-producing states in backlogs of unpaid 13 per cent derivation, which followed its discovery.
The interest of everyone, especially those who have the progress and economic interest of Osun state at heart, is to support the bold move of Adeleke to ensure that the state is not deprived of its due entitlement. This is not the time for politics but to pursue the state’s economic interest, which Adeleke pointedly noted he “was elected to protect and serve” and he should not be distracted from this priority.
Sarafa Ibrahim writes from Osogbo, Osun state. He can be reached through his email: [email protected] or Twitter: @SarafaNg
