Nigeria’s Gold Reserves Hit $1.36bn As Bandits Attack, Illegal Mining Frustrate Revenues

Amid rising demand for gold, Nigeria’s gold reserves with the Central Bank is valued only around $1.36bn analysis by THE WHISTLER has revealed.

Data from the World Gold Council showed the apex bank’s reserves was 21.37 tonnes which is an equivalent of 753,804.5669 ounces (oz).

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Gold prices have been on the surge with a current value of around $1,804 dollar per ounce as of October 25 which means that the CBN holds a reserve worth around $1.36bn.

In October 2019, price of gold was $1,482.00/ounce. It rose in October 2020 to $1,908.87 per ounce.

Gold Reserves are gold assets held or controlled by the central bank.

“The trouble with the optimization of gold deposits potentials is basically a reflection of the challenges of investment in the solid minerals sector.

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“It is true that we are blessed with abundant deposits of a variety of solid minerals (including gold deposits) but the value added to the economy remains insignificant,” Muda Yusuf, the CEO of Centre for the Promotion of Private Enterprise and former Director General of the Lagos Chamber of Commerce and Industry said in an interview with THE WHISTLER.

The poorly regulated gold market which expert believes could raise foreign exchange earnings has been marred by illegal mining and bandits’ activities.

Zamfara State government’s allegation that illegal mining which had gained prominence in the northwest, has fueled widespread “bandits” attacks.

The country has huge gold deposits near Maru, Anka, Malele, Tsohon Birnin Gwari-Kwaga, Gurmana, Bin Yauri, Okolom-Dogondaji and Iperindo in Osun state.

In July 2020, President Muhammadu Buhari had said gold mining regulation will earn the government $500 million a year in royalties and taxes and create up to 250,000.

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Nigeria lost $3bn to illegal gold mining between 2012 and 2018 due to poor regulation and illegal mining.

In the same year, CBN had licensed two gold refineries to produce gold held in its reserves and for export.

Worldwide, the demand for gold fell to 3,759.6 metric tonnes in 2020, a decrease from 4,386 metric tons in 2019, but inflation had driven gold prices higher in 2021.

According to the World Gold Council report, a one per cent rise in inflation pushes up gold demand by 2.6 per cent.

Yusuf said, “The stories from investors and prospective investors in the sector are not cheering. There are worries about the policy environment, the conflicts between the federal and state governments over jurisdictions on solid minerals, security concerns, infrastructure quality, especially access to mining locations.

“There is also the dominance of the solid minerals space by artisanal miners. There is a whole lot of reforms that needs to take place to reposition the solid minerals sector.”

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