PAGMI: Nigeria boosts foreign reserve with N268m artisanally mined gold

From left: Minister of Mines and Steel Development, Arc Olamilekan Adegbite; the Governor, Central Bank of Nigeria (CBN), Mr Godwin Emefiele; the Minister of State, MMSD, Dr Uchechukwu Ogah and the Executive Secretary, Solid Mineral Development Fund (SMDF), Hajia Fatima Shinkafi at the ceremony, in Abuja, on Thursday.

Following the presentation of the first artisanally mined gold bar valued at N268m to President Muhammadu Buhari by the Presidential Artisanal Gold Mining Initiative (PAGMI) on Thursday, in Abuja, and the immediate tender of the gold bar to the Governor of the Central Bank of Nigeria (CBN), Chief Godwin Emefiele, the nations foreign reserves is expected to witness a pilot boost that is based on the value of Initiative’s artisanally mined gold.

Chairman of PAGMI and Chief of Staff to the President, Prof Ibrahim Gambari received a dummy cheque of N268.6m from the Central Bank Governor for PAGMI’s maiden gold bar of 12.5kg.

The President disclosed that efforts are being made to support artisanal miners in improving the standard of the gold that would be sold to the Central Bank, in order to ensure that they meet international benchmarks.

He said the gold-buying program of the Central Bank will ensure that artisanal miners are no longer subjected to the volatility in gold prices that occur in the absence of credible off-takers, which often results to significant losses in the value of gold sold by miners.

Further discussing the advantages of PAGMI, the president said: ‘It will also improve economic activities in our rural communities,’ adding that about 250,000 jobs would be created from improved gold mining operations.

He assured Nigerians that government would continue to do its best to promote policies and programs that engender economic growth and jobs creation.

President Buhari said the implementation of the PAGMI scheme would result in the set-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.

‘The 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.’

He assured that Nigerians that PAGMI would support the effort of government to create jobs as well as boost the nation’s revenue base, and improve foreign exchange reserves.

Discussing hos PAGMI will help to mitigate the economic effects of the global fall in price of crude oil, the president said: ‘In Nigeria, the drop in crude oil price has had a significant impact on government revenue, as well as on our foreign exchange earnings,’ adding that in response to the challenge, government is implementing policies and programs that will enable greater diversification of the Nigerian economy.

In his welcome remarks, the Hon. Minister of Mines and Steel Development, Arc Olamilekan Adegbite described the ceremony as a milestone that is on the way to positioning the country into gold trade, adding that President Buhari is the first President to work-the-talk in respect of economic diversification, stating that in 2017, the president approved extra budgetary allocation of N30b to the sector as an intervention fund.

While saying that PAGMI is a pilot programme to develop a gold ecosystem that would serve as a pilot for gold trading in Nigeria, the minister explained that it aims to ‘formalize artisanal gold miners in Nigeria and through the establishment of registered and recognize buying centers, which buys-off mined gold, aggregates and refines it to London Bullion Market Association (LBMA) standard while the CBN will function as off-taker.’

The Minister further explained that PAGMI was to start with five states as pilot, namely Zamfara, Kebbi, Niger, Kaduna and Osun States but the government is currently giving priority to Kebbi and Osun States. He disclosed that the gold that was presented to the President today was from Kebbi State.

Adegbite said Nigeria has licensed two refineries, namely, Kian Smith and Dukia Gold. The refineries are to refine gold to LBMA standard in the country and sell to the Central Bank of Nigeria (CBN) in Naira.

According to Adegbite, the advantage of this is that CBN can buy gold in Naira and use that gold to shock up its deposit base, that is its foreign currency reserve in Dollars.

‘The gold is bought in Naira, and of course it gives CBN a dollar position because the LBME gold is recognised 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,’ the minister said.

At the ceremony, President Buhari reiterated the commitment of the administration to combating illegal mining and smuggling of gold, noting that the nation lost about $3b to illegal mining and smuggling of gold from 2012 to 2018.

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