Nigeria Boosts Foreign Reserves By $5m From Gold

From Lateef Taiwo

The first commercial transaction under her National Gold Purchase Programme, NGPP, has added US$5 million to Nigeria’s foreign reserves and boosted local economy by about N6 billion.

Minister of Solid Minerals Development, Dr Dele Alake made this known while presenting the latest gold bar sourced from artisanal and small gold miners and refined by an agency of the ministry, the Solid Minerals Development Fund, SMDF, to London Bullion Market Association Good Delivery Standard to President Bola Ahmed Tinubu at the weekend in Abuja.

According to the Minister, the refined gold would be sold to the Central Bank of Nigeria, CBN, to bolster foreign reserves.

Explaining to President Tinubu the significance of the event, Alake said it marked the first commercial transaction under the NGPP, the centralised offtake scheme supported by a decentralised aggregation and production network of artisanal and small-scale miners and cooperatives.

“The successful completion of the first commercial transaction clearly demonstrates the National Gold Purchase Program’s effectiveness. It has increased the nation’s foreign reserves assets and shown that using the Nigerian Naira to purchase a liquid asset traded in United States Dollars, such as gold, is a viable strategy. This transaction has also underscored the potential of the National Gold Purchase Program to enhance fiscal and
monetary stability,” he noted.

According to Alake, the first commercial transaction has delivered +US$5 million increase in Nigerian’s foreign reserves assets, 70+ kilogrammes of gold refined to the London Bullion Market Good Delivery Standard, and successful aggregation of locally mined gold thereby injecting about NGN6 billion into the rural economy.

Receiving and displaying a symbolic bar, President Tinubu commended the Ministry for achieving a major milestone in the administration’s drive to diversify the economy.

“This is another concrete step towards the diversification process under the Renewed Hope Agenda” the President said.

In her presentation, the Executive Secretary(ES) of the Solid Minerals Development Fund, Hajiya Fatimah Shinkafi, said the London Bullion Market Good Delivery Standard is the globally recognised stringent and trusted standard that enables the global trade in gold and silver bars.

“Only gold and silver bars that meet our Good Delivery standards are acceptable in the settlement of a Loco London contract – where the bullion traded is physically held in London” she said.

Shinkafi said, through the efforts of the NGPP under the ministry, Nigeria had joined a select group of countries bolstering their gold reserves by purchasing gold in local currency to foster economic confidence, enhance
currency stability, and create a more attractive environment for foreign investment.