President Muhammadu Buhari, on Thursday, lamented that Nigeria lost about $3 billion in six years to illegal smuggling of gold.
He made the declaration at the official presentation of locally mined gold bars by the Presidential Artisanal Gold Mining Development Initiative (PAGMDI), at the presidential villa, Abuja.
He pointed out that improved gold mining operations in the country will generate no fewer than 250,000 jobs and over $500m annually in royalties and taxes to the Federal Government.
President Buhari also reaffirmed his administration’s commitment to establishing gold refineries in Nigeria.
He said this laudable initiative would support efforts at creation of jobs for Nigerians, diversifying the revenue base, and improving foreign exchange reserves.
A statement issued by Femi Adesina Special Adviser to the President (Media & Publicity) after the presentation said while reiterating the determination of the Federal Government to combat illegal mining activities, “the President expressed concern that Nigeria lost close to $3b (268,608,236.00) from 2012 – 2018 due to illegal smuggling of gold.”
The statement quoted him as saying: ‘‘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 centres 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.”
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.
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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, President Buhari pledged that Government would pay close attention to safety and environmental measures to protect workers and the environment.
The President 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.
President Buhari 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 per cent 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 a 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.
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.
Furthermore, he said 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.
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 statement further quoted President Buhari: ‘‘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.”
Briefing State House correspondents after the virtual launch of gold purchase programme, Kebbi state Governor, Atiku Bagudu, who is also the Vice-Chairman of the Initiative, observed that many gold-bearing states have been mining illegally, noting that the situation will change with the PAGDMI implementation.
He said: “But they have been doing so illegally, with health hazards to themselves, damage to the environment and because of illegality, it brings insecurity.
“This programme now eliminates all that. They are supported by the programme to do so formally, they are now registered, they have modern tools, protective gear with minimal damage to the environment, and above all, they are buying centres where you will buy it from them at prices that they would never have gotten before.
“And with the creativity and support of the Central Bank Governor, this gold will go into reserve providing a ready market.
“So this energizes state governors, gold-producing communities across Nigeria and I believe this is an initiative that will see us through more individually and collectively in this gold production and ensure that people benefit from it.”
In her remark, the Executive Secretary of the Solid Minerals Development Fund (SMDF), Hajiya Fatima Shinkafi, said the launch of the PAGMDI provides a clearer vision for Nigeria’s direction.
She assured the private sector of the opportunity to participate.
Shinkafi stated: “We have started a good journey towards improving the economy and we are moving at a very fast speed.
“I hope that this will translate into a better life, most importantly for the households that we intend to impact in terms of making better standards of living for individual families that we are supporting directly and indirectly with the artisanal miners.
“Also, it is very important that I mention that the private sector should not feel that this is going to crowd them out because the government intends to have that persona in terms of our project.
“So, this is supposed to encourage private-sector-led investment. They have a space to participate in PAGMI and the laws and regulations are there. We will sensitize people together with the Ministry and the States, who have been very supportive as well.
“So in terms of what next, we hope to expand this and make the success of this pilot even bigger than this.”
Also speaking, Central Bank Governor, Godwin Emefiele, said with the purchase of the 12.5kg purified gold bar into the country’s reserves, the dream of economic diversification has been actualized.
He added: “As you all know for several years and decades, we have been talking about the need to diversify the revenue base of the Nigerian economy and we will say that today, this has been actualised in the sense that other than receiving dollar revenue from proceeds of the 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.
“As 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, that the Nigerian economy remains strong, remains resilient to withstand the exogenous shocks that we see around today.”