By Jide Ayobolu
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