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June 24, 2024

Foreign reserves boost: FG to sell refined gold to CBN

Foreign reserves boost: FG to sell refined gold to CBN

•As Alake presents gold bars to Tinubu

By Johnbosco Agbakwuru, Abuja

The Minister of Solid Minerals Development, Dr. Dele Alake, has said Nigeria’s refined gold will be sold to the Central Bank of Nigeria, CBN, to bolster foreign reserves and meet the London Bullion Market Association Good Delivery Standard.

The minister also commended President Bola Tinubu for supporting reforms in the solid minerals sector, assuring that the National Gold Purchase Programme would increase the country’s reserve and boost the naira’s value.

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, to meet the London Bullion Market Association Good Delivery Standard recently to the President, Alake said “the refined gold will be sold to the Central Bank of Nigeria to bolster foreign reserves.”

Explaining to President Tinubu the significance of the event, he said it marked the first commercial transaction under the National Gold Purchase Program, 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 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 said.

Alake said the first commercial transaction had delivered $5 million increase in Nigerian’s foreign reserves assets, 70+ kilograms of gold refined to the London Bullion Market Good Delivery Standard and successful aggregation of locally mined gold, thereby injecting about N6 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, Executive Secretary of the Solid Minerals Development Fund, Fatimah Shinkafi said the London Bullion Market Good Delivery Standard was 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 National Gold Purchase Programme under the Ministry of Solid Minerals Development, Nigeria has 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.