President Muhammadu Buhari has reaffirmed his administration’s commitment to establish gold refineries in Nigeria, saying that improved gold mining operations in the country would generate no fewer than 250,000 jobs and over 500million dollars annually. The President stated this at the official presentation of locally mined gold bars by the Presidential Artisanal Gold Mining Development Initiative, PAGMDI, at the Presidential Villa, Abuja. According to President Buhari, this laudable initiative would support efforts at creation of jobs for Nigerians, diversifying the revenue base, and improving foreign exchange reserves. While reiterating the determination of the Federal Government to combat illegal mining activities, the president expressed concern that Nigeria lost close to three billion dollars from 2012 – 2018 due to illegal smuggling of gold. “With the implementation of the PAGDMI scheme which will result in the set-up of accredited gold buying centres across key mining areas, artisanal miners and SMEs engaged in mining will be able to capture the value of their work. “These operations will help in diversifying our revenue base. 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. “These developments will also help in improving our foreign reserves by enabling the Central Bank of Nigeria to increase the amount of gold in its reserves. “These gold assets which will be purchased in Naira, will not only help to bolster our international reserves, but also provide a hedge against inflation and other economic volatilities associated with foreign currencies that are held in our reserves,” the President said.
President Buhari noted that in addition to the potential revenue gains that will occur from mining operations, efforts are being made to enable the setting up of gold refineries in Nigeria. He expressed optimism that these measures would lead to the creation of additional job opportunities across the gold value chain and also help the nation capture the additional value created from the gold refining process. On environmental degradation, Mr Buhari pledged that the Government would pay close attention to safety and environmental measures to protect workers and the environment. The Nigerian leader also used the occasion to commend all stakeholders involved in the PAGMI for their painstaking efforts in developing a programme aimed at improved sourcing and refining of high-quality gold bars, derived from minefields in Nigeria.
The President recalled that the PAGMI, which was launched in 2019, was well timed, considering the impact of COVID-19 on the global economy and indeed on the Nigerian economy. He said the impact of COVID-19 and the containment measures designed to slow the spread of the virus, had led to a slowdown in global growth, which is projected to decline into negative territory for the first time since the Great Depression. “It has also led to a 40 percent drop in crude oil prices. 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. “Enabling investment in the Solid Mineral sector, is a key part of the government’s economic diversification program. “Given our current estimated gold reserves of over 200m ounces, most of which have not been exploited, developing sustainable programmes that will catalyse increased investment in the extraction and refining of gold sourced from mines in Nigeria, is indeed vital,” he said. While emphasizing the benefits of the PAGMDI, the president explained that it will support job creation efforts particularly for artisanal miners, by providing them with a guaranteed offtake by the Central Bank of Nigeria.
According to him, efforts are being made to support artisanal miners in improving the standard of the gold that will be sold to the apex bank, in order to ensure that they meet international benchmarks. He added that the initiative would enable the deployment of financing schemes that would help miners improve on the quality of their mining operations. “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 illegal smuggling,” he said.
Nigeria’s new gold development initiative has the potential to ensure the economy remains strong and resilient to withstand the exogenous shocks noticed globally. Central Bank of Nigeria Governor, CBN, Godwin Emefiele, Speaking with State House Correspondents in Abuja said the initiative is aimed at diversifying the revenue base of the Nigerian economy. This is as Federal Government could rake in additional estimated revenue annual average of $150 Million in taxes, $25 Million in royalties, and $500 Million accretion to foreign reserves from the integration of artisan gold mining activities ”We will say that today this has been actualised in the sense that other than receiving dollar revenue from proceeds of sale of crude oil, we have today received into our reserves through the purchase of this 12.5kg purified gold bar into our reserves, we have today received gold into our reserves” Following the successful launch of the program, Central Bank will now be purchasing gold that has been mined, processed and refined under the Presidential Artisanal Gold Mining Development Initiative PAGMDI for use as part of Nigeria’s external reserves. “PAGMI will result in the creation of over 500,000 new mining and formalized jobs, leading to poverty alleviation for more than 1 million households.
The artisanal gold miners, according to Emefiele, earn more from higher productivity, achieve better recovery rates through mechanization of operations, and better access to reliable geological information. “Like you all know, gold is valued in the international market in dollars so what does that mean? This gold is valued at dollar sum that will go into our reserves and what does that also mean that for those who feel that the only way they can analyse Nigeria is to say what is the price of crude, is the price of crude high or is the price of crude low, they will now begin to see that at this time when the price of crude is low, the price of gold is rising.
The CBN Governor assured Nigeria’s friends both locally and internationally to that the “Nigerian government supported by the monetary authorities is doing everything possible to diversify the base of the Nigerian economy and in the coming weeks and months, adding that “Nigerians and the world will see more that is going to be done in improving the output from our agricultural sector , improving productivity from the manufacturing sector , doing everything to make it easy for goods to move from farms to market in Nigeria. “All this are being done to ensure that the Nigerian economy remains resilient to withstand any shock that may come our ways The gold initiative is seen as a milestone in the country’s commitment to diversifying Nigeria’s economy and foreign reserves, coming after 24 months of intense efforts between the Solid Minerals Development Fund, Kebbi and Osun States Government, Ministry of Mines and Steel Development, and the Ministry of Finance, Budget, and National Planning under a Steering Committee led by the Chief of Staff to the President, Ibrahim Gambari.
The initiative is also expected to boost national identity management through the biometric registration of over 20, 000 artisanal miners nationwide. The PAGMI will also ensure that responsible sourcing standards, as outlined in the OECD Due Diligence Guidance, are adhered to, and the gold bars delivered to the Central Bank of Nigeria are Responsibly-Sourced, and LBMA Certified. Health, Safety and Environmental Benefits: From 2010 to 2016, there were more than 7,000 incidences of lead poisoning, resulting in 700 deaths, related to gold mining activities in Zamfara and Kebbi alone. The recorded lead levels, at 23,000 ppm, were more than 55x the maximum acceptable level for environmental lead levels (400 ppm). “Effective implementation of PAGMI will help to control the use of lead, mercury, and cyanides. PAGMI will also improve the working condition of artisanal miners, thereby reducing the number of in-pit deaths that are seen on an annual basis”
If you are thinking of investing in gold, you will need some reliable information to guide your decision. Below are seven critical facts and benefits of investing in gold.
Unlike common coins, paper currencies, or other types of assets, gold is known for maintaining its value over centuries. The unique physical properties of gold are also highly esteemed. The precious metal is known for its resistance to corrosion and the fact that it can be melted. This allows it to be worked with very quickly or stamped as a coin.
It is usually a good idea to hold some physical gold in the form of coins or bars. However, there are also other convenient options available for anyone looking to invest in gold. One way to profit from gold is to invest in gold mining shares. This allows you to reap the benefits of gold price increases without the hassle of storing the physical metal. During gold bull markets, mining shares often outpace the price of gold. If you want to hold physical gold, you will need to decide what form it will take. Gold bars look impressive, but they tend to be quite heavy and awkward to store. You would need to invest in a safe or use a bank to store your gold. If you decide to buy coins, you will need to determine if you want collector coins or freshly minted ones. When you buy collectible coins, you are paying a premium for the uniqueness of the investment and the scarcity that it represents. Newly created coins are often recommended for those who are not taking up gold coins as a hobby.
Gold has a well-earned reputation for making a great hedge against the inflation that can eat away at the value of paper assets. No matter what happens to gold, it will retain the value that it took to mine and produce it, while paper assets can theoretically go to zero. During periods of high inflation in the past, the stock market has often plunged, while the price of gold soared. This is because paper currency loses its purchasing power against gold because gold is priced in that type of currency. People tend to buy gold at an increased rate when their local currencies are plummeting in value.
Markets hate uncertainty. Gold is historically known for retaining its value regardless of external political conditions. Whenever there is a political crisis, gold tends to take off. People love the safety that investing in gold delivers.
Much of the available gold supply is the result of global central banks selling gold bullion. Generally, when the amount of gold decreases, the price of gold increases.
Gold-based IRAs are becoming increasingly popular these days. Backing your IRA with gold offers excellent protection for your retirement funds when market changes can implode your overall investment portfolio. The gold IRA is a retirement account that is approved by the government and backed by physical gold. Traditional IRAs are often loaded with equities from a time when the economy and government was more stable. The global economy is showing signs of weakness. Therefore, paper assets are too much of a risk for many investors. Especially given the events of the Great Recession, the uncertainties of investing in paper assets led to the reduction of the retirement accounts of several people.
A gold based IRA can offer substantial portfolio diversification that hedges against risks in the overall market. It can also protect your hard-earned money from the forces of inflation and unsound fiscal policy.
Emerging markets, like highly populated India and China, have increased the demand for gold. Gold typically has a more prominent place in the culture of these types of countries. Gold demand in China has been steady among those who view gold bars as a traditional type of savings. In India, gold is highly valued during the wedding season, increasing the global demand for gold
*** Written by Jide Ayobolu.