FG Revamps National Gold Purchase Program to Boost Reserves and Strengthen Naira

In a strategic move to enhance the country’s foreign reserves and bolster the value of the Naira, the Federal Government has revamped the National Gold Purchase Program.

This initiative was highlighted when the Minister of Solid Minerals Development, Dele Alake, presented a newly refined gold bar to President Bola Tinubu in Abuja.

The gold bar, sourced from artisanal and small-scale miners and refined by an agency of the Ministry, signifies a milestone in the government’s efforts to reform the solid minerals sector.

Alake praised President Tinubu for his support, assuring that the sector will soon contribute significantly to the nation’s reserves.

Alake announced that the refined gold meets the London Bullion Market Association’s (LBMA) Good Delivery Standard and will be sold to the Central Bank of Nigeria (CBN) to strengthen foreign reserves.

“The successful completion of the first commercial transaction under the National Gold Purchase Program demonstrates its effectiveness,” Alake said.

“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 underscores the potential of the program to enhance fiscal and monetary stability.”

The inaugural commercial transaction has delivered over $5 million in increased foreign reserves assets, 70+ kilograms of gold refined to the LBMA Good Delivery Standard, and successful aggregation of locally mined gold, injecting approximately NGN6 billion into the rural economy.

President Tinubu, upon receiving and displaying the symbolic gold bar, commended the Ministry for this significant achievement, which he described as 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.

Fatimah Shinkafi, Executive Secretary of the Solid Minerals Development Fund, explained that the LBMA Gold Delivery Standard is globally recognized and essential for enabling 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 added that through the efforts of the National Gold Purchase Program, Nigeria has joined a select group of countries bolstering their gold reserves by purchasing gold in local currency.

This move aims to foster economic confidence, enhance currency stability, and create a more attractive environment for foreign investment.