Nigeria Turns to Locally-Mined Gold to Boost Foreign Reserves and Strengthen Economy
The Federal Government of Nigeria has unveiled a strategic initiative to strengthen the country’s foreign reserves by purchasing locally-mined gold, reducing reliance on scarce dollars. The programme, launched in August under the Solid Minerals Development Fund (SMDF), aims to convert artisanal gold into a tool for economic stability, supporting both the naira and domestic financial security. Speaking at the 10th Nigeria Mining Week in Abuja, Minister of Solid Minerals Development, Dr. Oladele Alake, described the gold acquisition plan as a “fast and effective” strategy to bolster the Central Bank of Nigeria’s reserves.
Dr. Alake explained that the initiative allows the government to buy gold from local miners using naira rather than importing it with dollars. “This approach directly strengthens our foreign reserves without depleting our foreign currency holdings,” he said, noting that the programme also stimulates local employment and economic activity. Workers and miners are paid in naira, which circulates within the domestic economy, creating a multiplier effect on growth. The Minister confirmed that 2025 will see increased funding for the initiative, reflecting the President’s confidence in its potential to fortify Nigeria’s economic resilience.
The SMDF Executive Secretary, Mrs. Fatima Shinkafi, highlighted lessons from early challenges in the sector, noting that many prospective miners underestimate the technical and financial demands of the industry. “Mining is not a quick win. It requires serious science, funding, and long-term commitment,” she said. Despite these hurdles, she emphasized that Nigeria’s gold sector is outperforming global trends, with rising exploration funding even as investment declines in other countries. Global uncertainty, including tensions between the U.S. and China, the war in Ukraine, and Middle East conflicts, has also increased international demand for gold as a safe-haven asset, currently trading above $4,200 per ounce.
The government is also exploring broader measures to reduce dollar dependency in the domestic economy, including potential policies that could prevent schools from charging tuition in foreign currency. These moves align with the wider agenda of promoting local resource utilization and economic self-reliance. Mrs. Shinkafi praised Dr. Alake’s reforms and support for junior miners, stressing that the government is actively working to make Nigeria an attractive destination for mining investment and exploration.
However, industry voices caution that challenges remain. Fatai Jimoh, National Publicity Secretary of the Miners Association of Nigeria (MAN), noted that rising service fees are placing pressure on local miners. “While the sector has enormous potential, indigenous miners need more support to thrive and sustain growth,” he said, highlighting the importance of balancing policy initiatives with practical measures that empower domestic stakeholders.
source: The guardian