A bill advocating the use of gold by the Central Bank of Nigeria (CBN) to control inflation and stabilize the naira has advanced to its second reading in the Senate.
Natasha Akpoti-Uduaghan, a senator from the Peoples Democratic Party (PDP) representing Kogi Central, introduced the ‘Gold Reserve Bill’ to formalize the CBN’s role in the gold industry.
The bill proposes policies designating the CBN as the primary purchaser of all gold produced in Nigeria.
Akpoti-Uduaghan suggested establishing a gold reserve authority to ensure a consistent supply of gold to the CBN for managing Nigeria’s gold reserves. The bill specifies that the CBN governor will chair the gold reserve management committee.
One of the bill’s objectives is to “ensure the stability of the national economy by using gold reserves as a financial anchor, providing a secure foundation for currency value and overall economic health.”
Additionally, the bill aims for the CBN to manage Nigeria’s gold reserves to mitigate inflation and deflation risks, thereby contributing to stable currency values and price levels in the country. Another goal is for the CBN to use the “gold reserves to support and stabilize the national currency in the foreign exchange market, ensuring a favorable position in international trade and finance.”
The draft proposes that the CBN shall ensure that at all times, its external assets, including gold coins or bullion, constitute at least 30 percent of its total external reserves.
The bill also seeks to exempt the importation of plant, machinery, equipment, and accessories specifically for gold mining operations from customs and import duties.
Since assuming office in May 2023, President Bola Tinubu has aimed to transform Nigeria’s mining industry to attract investors. On June 23, Dele Alake, the minister of solid minerals development, presented refined gold bars to the president, noting that the first transaction of the commodity added $5 million to Nigeria’s external reserves.
Alake mentioned that the refined gold will be sold to the CBN to bolster foreign reserves.
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