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Nigeria Boosts Foreign Reserves with $5 Million from First National Gold Purchase Program

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Nigeria has made a significant stride in bolstering its foreign reserves, thanks to its burgeoning National Gold Purchase Program (NGPP). The Minister of Solid Minerals Development, Dele Alake, announced over the weekend that more than 70 kilograms of gold, sourced within Nigeria, have been refined and are ready for export. This monumental achievement has added over $5 million to the nation’s foreign assets reserve.

Alake’s revelation came during the presentation of gold bars to President Bola Ahmed Tinubu, a symbolic gesture marking the success of the NGPP’s first commercial transaction. The National Gold Purchase Program, a centralized offtake scheme supported by a decentralized network of artisanal and small-scale miners and cooperatives, aims to streamline and boost the gold mining sector.

“The successful completion of the first commercial transaction clearly demonstrates the National Gold Purchase Program’s effectiveness,” Alake stated. “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.”

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Economic Impact and Presidential Commendation

During the presentation, Alake handed over a gold bar refined by the Solid Minerals Development Fund to meet the London Bullion Market Association Good Delivery Standard. This refined gold will be sold to the Central Bank of Nigeria to further bolster the country’s foreign reserves.

In his address, Alake emphasized the transaction’s significance, noting it had injected about ₦6 billion into the rural economy through the aggregation of locally mined gold.

“This transaction has also underscored the potential of the National Gold Purchase Program to enhance fiscal and monetary stability,” he added.

President Bola Ahmed Tinubu holding a a good bar from the National Gold Purchase Program presentation

President Bola Ahmed Tinubu holding a a good bar from the National Gold Purchase Program presentation

Tinubu, upon receiving the gold bar, lauded the Ministry for its efforts and achievements. “This is another concrete step towards the diversification process under the Renewed Hope Agenda,” he said, highlighting the administration’s drive to diversify Nigeria’s economy away from its heavy reliance on oil.

London Bullion Market Association Good Delivery Standard

The executive secretary of the Solid Minerals Development Fund, Fatima Shinkafi, provided insights into the stringent standards met by the refined gold.

“The London Bullion Market Good Delivery Standard is the globally recognized stringent and trusted standard that enables the global trade in gold and silver bars,” Shinkafi explained.

She elaborated on the broader implications of meeting this standard, stating, “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.”

National Gold Purchase Program’s Broader Goals

Through the efforts of the NGPP, Nigeria has joined a select group of countries bolstering their gold reserves by purchasing gold in local currency. This initiative aims to foster economic confidence, enhance currency stability, and create a more attractive environment for foreign investment.

Alake also praised the President for his unwavering support of reforms in the solid minerals sector. He assured that the National Gold Purchase Program would continue to grow the country’s reserves and boost the value of the naira.

“The NGPP is poised to become a cornerstone of Nigeria’s strategy to enhance economic resilience and stability,” Alake remarked.

Enhancing Artisanal and Small-Scale Mining

A key component of the NGPP is its support for artisanal and small-scale miners. By creating a structured framework for the aggregation and production of gold, the program not only ensures higher quality and compliance with international standards but also provides significant economic benefits to rural communities.

The program’s decentralized network encourages local miners to participate in the formal economy, offering them fair prices and reducing the risks associated with informal mining practices. This, in turn, stimulates local economies and provides sustainable livelihoods for thousands of miners and their families.

Read Also: Inflation: Nigeria Seeks Extension for World Bank Loan Amidst Economic Challenges

Future Prospects for Nigeria’s Solid Minerals Sector

Looking ahead, the success of the NGPP sets a promising precedent for the future of Nigeria’s solid minerals sector. The government’s commitment to leveraging its natural resources to diversify the economy and stabilize the currency is evident in the structured approach and strategic investments being made.

“This is just the beginning,” said Alake. “We are committed to scaling up our efforts, increasing production, and ensuring that Nigeria becomes a major player in the global gold market.

The National Gold Purchase Program is not just about increasing foreign reserves; it is a comprehensive approach to building a sustainable, inclusive, and prosperous economy. By harnessing the potential of its natural resources, Nigeria is laying the groundwork for long-term economic stability and growth.

As Nigeria continues to implement and expand the NGPP, the country stands poised to reap even greater benefits from its solid minerals sector, reinforcing its economic foundation and securing a brighter future for its citizens.

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