President Muhammadu Buhari says Nigeria lost close to $3b from 2012 to 2018 due to the smuggling of gold in the country.
He made this known during the official presentation of locally mined sourced gold bars by the Presidential Artisanal Gold Mining Development Initiative (PAGMI) in Abuja.
A statement signed by the Director of Press Ministry of Mines and Steel Development, Mr. Edwin Opara says the President reiterated his administration’s commitment to ending illegal mining in the country.
It states that the implementation of the PAGMI scheme would result in the setting-up of accredited gold buying centres across key mining areas as artisanal miners and SMEs engaged in mining would be able to get value for what they mine.
‘These operations will help in diversifying our revenue base as the sale of gold by artisanal miners and SMEs at accredited centers will help the government in realizing royalties and taxes from the sale of these assets”
The statement assures Nigerians that this laudable initiative will help support government’s efforts at enabling the creation of jobs for Nigerians, boost the nation revenue base, and improve foreign exchange reserves.
“In Nigeria, the drop in crude oil prices has had a significant impact on government revenue, as well as on our foreign exchange earnings. In responding to this challenge, it is therefore paramount that we strengthen our efforts at implementing policies and programs that will enable greater diversification of the Nigerian economy” President Buhari adds.
It also discloses that efforts are being made to support artisanal miners in improving the standard of the gold that will be sold to the Central Bank, in order to ensure that they meet international benchmarks.
“The gold buying program by the Central Bank will ensure that artisanal miners are no longer subjected to the volatility in gold prices that occurs in the absence of credible off-takers, which has often led to a significant loss in the value of gold sold by miners, as well as in encouraging smuggling”.
“It will also help support improved economic activities in our rural communities. As a result, we expect that close to 250,000 jobs would be created from improved gold mining operations”, he explains.
According to the statement, the President therefore assured Nigerians that the Government would continue to do its best to promote policies and programs that would improve economic growth and the creation of jobs for the teeming populace.
Earlier, the Minister of Mines and Steel Development, Mr. Olamilekan Adegbite in a remark, said the event was a milestone on the way to positioning the country into gold trade.
He said President Buhari is the first President to work the talk in respect of the diversification of the country economy by approving extra budgetary allocation of N30 Billion in 2017 to the sector as an intervention fund.
The Minister further explained that the PAGMI initiative is a pilot programme to develop a gold ecosystem that would serve as a pilot for gold trading in Nigeria.
“The essence is to formalize artisanal gold miners in Nigeria and through registered and recognize buying centers, takes off their mined gold, aggregate and refine it to London Bullion Market Association (LBMA) standard and the CBN will be the off taker for this.”
He said PAGMI was to start with five (5) states as pilot, that is Zamfara, Kebbi, Niger, Kaduna and Osun States but the government is currently giving priority to Kebbi and Osun States.
He explained that the gold that was presented to the President today was from Kebbi State.
Adegbite said Nigeria has licensed two refineries, that is Ken Smith and Dukia Gold to refine gold to LBMA standard in the country and sell to the Central Bank of Nigeria (CBN) in Naira.
The advantage of this according to him is that CBN can buy gold in Naira and use that gold to shock up its deposit base, that is its foreign currency reserved in dollars.
“The gold is bought in Naira, and of course it gives CBN a dollar position because the LBME gold is recognize internationally. So this is a way of diversifying the economy that the President has been talking about.
“We are no longer just waiting for dollar posits from crude oil sales, we can now get dollars from our gold in Nigeria”, he further explained.