Nigeria has marked a significant milestone with its first commercial transaction of raw gold sales at the London Bullion Market Association, according to Dele Alake, the Minister of Solid Minerals Development.
Announced on Sunday, this transaction has added $5 million to Nigeria’s foreign reserves.
The deal involved over 70 kilogrammes of gold, refined to the London Bullion Market Good Delivery Standard, which were sourced from local artisanal and small-scale miners.
This initiative has injected approximately N6 billion into the rural economy.
Minister Alake revealed these developments while presenting the latest refined gold bar to President Bola Tinubu over the weekend. The gold was processed by the Solid Minerals Development Fund and will be sold to the Central Bank of Nigeria to further bolster the country’s foreign reserves.
Nigeria is reported to have around 600,000 metric tonnes of gold reserves, valued at about $45 billion, located in states such as Zamfara and Edo.
However, the nation faces significant challenges with illegal mining, which has diverted considerable wealth into private hands, reducing resources intended for public benefit. In response to this, former President Muhammadu Buhari declared Zamfara State a ‘no-fly zone’ three years ago to combat illegal mining activities.
At the event, Alake praised President Tinubu for supporting reforms in the solid minerals sector, asserting that the National Gold Purchase Programme will help increase the country’s reserves and strengthen the naira. He emphasised that this first commercial transaction under the programme demonstrates its effectiveness in enhancing Nigeria’s foreign reserves and monetary stability.
“The successful completion of this transaction has validated the National Gold Purchase Program’s strategy. It shows that using the Nigerian Naira to buy a liquid asset traded in U.S. dollars, such as gold, is viable,” Alake stated.
President Tinubu, displaying the symbolic gold bar, commended the Ministry for this achievement, highlighting it as a concrete step towards economic diversification under the Renewed Hope Agenda.
Fatimah Shinkafi, Executive Secretary of the Solid Minerals Development Fund, explained that the London Bullion Market Good Delivery Standard is a globally recognised benchmark for trading gold and silver bars. She noted that only gold and silver bars meeting these standards are acceptable for settlement in Loco London contracts, where bullion is physically held in London.
Shinkafi added that through the National Gold Purchase Programme, Nigeria has joined a select group of countries enhancing their gold reserves by purchasing in local currency, fostering economic confidence, currency stability, and attracting foreign investment.
