The Nigerian Senate is considering a new law that seeks to increase the share of gold in the country’s foreign reserve assets from 4% to 30%.
This strategy is intended to diversify the reserves away from reliance on the US currency and toward a more sustainable commodity.
The Central Bank would be designated as the automatic buyer of all gold produced in the nation under a draft measure currently before the Senate.
As of the end of November, Nigeria’s reserves were valued at $34.8 billion, of which just 4% was held in gold.
The new measure will bring the mainly unregulated gold mining sector, which now contributes very little to the economy, under the Central Bank’s authority and incorporate it into the official economy.
To supervise the administration of the nation’s gold reserves, the Red Chamber is recommending the creation of a Gold Reserve Authority.
The goal of this new body is to provide the process of managing gold reserves more structure and supervision.
The governor of the central bank Yemi Cardos is recommended to head a newly established gold reserve management committee in addition to establishing the Gold Reserve Authority.
The committee would have the authority to decide how to handle and distribute the gold reserves. This committee’s structure and duties are intended to be very similar to those of the monetary policy committee of the central bank.
The goal of this parallel organization is to guarantee that the country’s gold reserves are managed with a high degree of proficiency and uniformity.
Nigeria’s foreign reserve assets increased by more than $5 million as a result of deals involving the purchase of gold bars from local miners, according to a June announcement made by Minister of Solid Minerals Development Dele Alake.
Alake revealed this information to President Bola Tinubu when presenting him with a batch of gold bars purchased through the National Gold Purchase program.
In an attempt to strengthen the value of the naira relative to other currencies, he also made hints that the government is looking to buy additional gold bars from regional artisanal miners.
