Gold commercialisation nets Nigeria $5m in foreign reserves

Business a.m.

Nigeria’s foreign reserves have received an infusion of $5 million and the rural economy has been rejuvenated with an injection of N6 billion, thanks to the success of the first commercial transaction under the National Gold Purchase Programme (NGPP).

Dele Alake, the minister of solid minerals development, made the declaration at the Presidential Villa in Abuja, where  he presented a gold bar to President Bola Ahmed Tinubu, sourced from artisanal and small gold miners and refined by the Solid Minerals Development Fund to meet the London Bullion Market Association good delivery standard.

According to Alake, the event marked the first commercial transaction under the NGPP, a centralised offtake scheme supported by a decentralised network of artisanal and small-scale miners and cooperatives. He also commended the president for his leadership in driving forward the transformational reforms underway in Nigeria’s solid minerals sector.

Alake stated that the conclusion of the inaugural commercial transaction within the National Gold Purchase Programme not only validates the efficiency of the programme but also highlights a paradigm-shifting approach to boosting Nigeria’s economic fortunes.

The minister also noted that the groundbreaking scheme has already augmented the nation’s foreign reserves assets, while simultaneously showcasing the viability of using the Nigerian Naira to procure gold, a highly liquid asset traded in US dollars.

“The initial transaction has resulted in a +$5 million increase in Nigeria’s foreign reserves, the refinement of over 70 kilogrammes of gold to the London Bullion Market Good Delivery Standard, and the successful aggregation of locally mined gold, injecting approximately 6 billion into the rural economy,” Alake stated.

President Tinubu, upon receiving and displaying the symbolic gold bar, commended the solid minerals development ministry for achieving a significant milestone in the administration’s efforts to diversify the economy, saying, “This is another concrete step towards the diversification process under the Renewed Hope Agenda.”

Fatimah Shinkafi, executive secretary of the Solid Minerals Development Fund, noted that the London bullion market good delivery standard is a globally recognised and trusted benchmark enabling global trade in gold and silver bars.

Shinkafi explained that only gold and silver bars that meet the Good Delivery standards are acceptable in the settlement of a Loco London contract,where the bullion traded is physically held in London.

The executive secretary also highlighted that through the NGPP, Nigeria has joined a select group of countries enhancing their gold reserves by purchasing gold in local currency.