President Muhammadu Buhari has voiced concern that Nigeria lost close to $3b from 2012 – 2018 due to illegal smuggling of gold.
President Buhari spoke on Thursday during the official presentation of locally mined gold bars by the Presidential Artisanal Gold Mining Development Initiative (PAGMDI) at the Presidential Villa, Abuja.
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The President, who renewed the determination of his administration to combat illegal mining activities, said improved gold mining operations in the country would generate no fewer than 250,000 jobs and over $500m annually in royalties and taxes to the Federal Government.
He said this laudable initiative would support efforts at creating jobs for Nigerians, diversifying the revenue base, and improving foreign exchange reserves.
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.
“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, it will also provide a hedge against inflation and other economic volatilities associated with foreign currencies that are held in our reserves,” the President said in a statement issued by his spokesman, Femi Adesina.
He also voiced 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.
Buhari, while speaking on environmental degradation, promised that government would pay close attention to safety and environmental measures to protect workers and the environment.
He lauded 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.
The President while stressing the benefits of the PAGMDI, explained that it will support job creation efforts particularly for artisanal miners, by providing them with a guaranteed off-take by the Central Bank of Nigeria.
He said efforts are also 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.
According to him, the initiative will enable the deployment of financing schemes that will 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.