FG to buy local gold with naira to shore up foreign reserves, says Alake

Dele Alake, the minister of solid minerals development, says the national gold purchase programme (NGPP) will boost the country’s foreign reserves and strengthen the naira.

Alake spoke on Wednesday in Abuja at the Nigeria gold day celebration, held on the sidelines of the 10th edition of the Nigeria mining week.

He said the programme, which involves using the naira to purchase locally mined gold to be kept by the Central Bank of Nigeria (CBN), will also curb smuggling and reposition the solid minerals sector.

“The philosophy of that programme, how salutary it is, is that, we use our local naira, not foreign exchange, to mop up gold, then sell it to the CBN,” he said.

Alake explained that the gold held by the CBN would then count as a foreign currency asset, directly improving the value of the nation’s reserves.

“The CBN in turn, makes part of the payment in naira but the gold kept in its vault becomes a foreign currency asset.

The process thereby, increases the value of our foreign reserves and reduces the pressure on the local currency,” the minister stated.

He added that the solid mineral development fund (SMDF) is driving the initiative with an increased allocation in 2025 to reduce reliance on dollars.

“This is to say that there is no amount of economic calculation you can do that will be faster in terms of shoring up our foreign reserves than this particular gold programme,” Alake added.

Also speaking at the event, Fatima Shinkafi, the executive director of the SMDF, said gold exploration funding in Nigeria is trending upwards, contrary to global trends.

Earlier, Shuaibu Abubakar, the minister of steel development, said the federal government has initiated talks with the Republic of China to take over the revitalisation of the Ajaokuta Steel Company Limited (ASCL).