Nigeria’s Minister of Solid Minerals Development, Dr. Dele Alake, has reassured President Bola Tinubu that the National Gold Purchase Programme would enhance the country’s reserves and boost the Naira’s value.
He stated this during the presentation of refined gold bars meeting the London Bullion Market Association Good Delivery Standard. Alake detailed plans to sell the gold to the Central Bank of Nigeria to boost foreign reserves.
Enhancing Reserves and Currency Stability
Alake explained that this marked the inaugural commercial transaction under the National Gold Purchase Programme (NGPP), which centralizes off-take while being supported by a decentralized network of artisanal and small-scale miners and cooperatives.
“The successful completion of the first commercial transaction clearly demonstrates the National Gold Purchase Programme’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 Programme to enhance fiscal and monetary stability,” he stated.
Boosting Foreign Reserves and Local Economy
Alake elaborated that the initial sale resulted in a $5 million increase in Nigeria’s foreign reserves assets, with over 70 kilograms of gold refined to the London Bullion Market Good Delivery Standard.
Additionally, approximately N6 billion has been injected into the formal sector through successful aggregation of locally mined gold.
President Tinubu lauded the Ministry for achieving a significant breakthrough in diversifying the economy.
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This is another concrete step towards the diversification process under the Renewed Hope Agenda,” Tinubu stated.
Global Recognition and Currency Stability
During her presentation, Executive Secretary of the Solid Minerals Development Fund, Fatimah Shinkafi, emphasized the London Bullion Market Good Delivery Standard’s global recognition as a stringent and trusted standard enabling the global trade in gold and silver bars.
“Only gold and silver bars meeting our Good Delivery standards are acceptable in the settlement of a Loco London contract – where the bullion traded is physically held in London,” she highlighted.
Shinkafi added that through the efforts of the National Gold Purchase Programme under the Ministry of Solid Minerals Development, Nigeria has joined a select group of countries that boost their gold reserves by purchasing gold in local currency to enhance currency stability and attract foreign investment.
Additional Insight
Adding to the discussion on the significance of the National Gold Purchase Programme, it is important to note that such initiatives not only strengthen a country’s foreign reserves but also promote the formalization of the artisanal and small-scale mining sector. By centralizing off-take through programs like the NGPP, governments can ensure better regulation of the industry, leading to increased transparency and accountability. This, in turn, can attract more investments and contribute to sustainable economic growth in the long run.
