The House of Representatives Committee on Solid Minerals Development has expressed strong disapproval of the conduct of some foreign entities operating within Nigeria’s solid minerals sector, spotlighting two Chinese companies that reportedly owe the Federal Government over ₦15 billion in unpaid Value Added Tax (VAT).
This revelation was made by the committee’s chairman, Jonathan Gaza, during a ministerial retreat organized by the Ministry of Solid Minerals Development for its top officials in Abuja on Friday. According to Gaza, the committee unearthed this VAT evasion during an investigation into the operations of foreign players in the sector. Although he declined to name the offending companies, he noted that their response to the allegations was as shocking as it was audacious.
“When we asked the Chinese nationals why they had failed to pay VAT to the Nigerian government, they simply told us they don’t pay VAT,” Gaza revealed. He described the response as deeply troubling, particularly in light of the nation’s urgent need for revenue and the Federal Government’s efforts to restructure and breathe new life into the solid minerals sector.
Despite the setback, Gaza acknowledged the significant progress made so far in repositioning the sector under the current administration. He noted that in 2024 alone, the sector generated ₦38 billion in revenue and attracted over $800 million in Foreign Direct Investment (FDI), achievements he attributed to renewed policy direction and governance.
Also speaking at the retreat, Minister of Solid Minerals Development, Dr. Dele Alake, addressed another persistent challenge confronting the sector: interference by state governments in mining operations. Alake decried the growing trend of state authorities attempting to regulate mining activities within their territories, an action he said was not only unconstitutional but also harmful to investor confidence.
“Sub-nationals have over time issued directives or moved to regulate mining operations,” he explained, adding that “this is even more rampant today than ever before.” The minister pointed out that such actions directly contradict Nigeria’s 1999 Constitution, which places mining under the exclusive legislative list—meaning only the Federal Government has the legal authority to oversee and regulate mining activities.
Alake emphasized that despite several efforts to engage state governors on the matter, compliance remains limited. The minister, who has held consultations with state leaders in a bid to find common ground, admitted that the issue has persisted.
“I have made this concern known to Mr. President, and he has now given me the mandate to take decisive action,” he announced. “What state governments are doing sends the wrong signal to investors. They do not have the authority to shut down mining sites or interfere with legally-backed operations.”
The minister warned that in the coming days and weeks, the federal government, through the Ministry of Solid Minerals Development, would begin enforcing compliance strictly and unapologetically. He promised that the ministry would act swiftly and decisively to protect the integrity of Nigeria’s mining sector and restore investor confidence.
Alake’s pronouncement marks a new phase in the federal government’s crackdown on what it views as unconstitutional overreach by sub-national governments and a renewed push to establish greater fiscal discipline among foreign investors in the sector.
What you should know
Two unnamed Chinese companies owe over ₦15 billion in unpaid VAT to Nigeria, according to a House committee investigation.
Meanwhile, the Federal Government is preparing to enforce constitutional limits on state interference in mining, following a directive from President Tinubu to Minister Dele Alake to ensure compliance with federal mining regulations.
