The Central Bank of Nigeria (CBN) has announced the addition of a fresh batch of locally sourced gold, refined to the internationally recognised standards of the London Bullion Market Association (LBMA), to its foreign reserves. The move represents more than a routine financial update; it signals a significant shift in Nigeria’s approach to managing its mineral wealth.
By incorporating gold into its reserve portfolio, Nigeria is transforming the metal from an informal, largely artisanal commodity into an instrument of economic policy. The initiative aims to diversify the country’s reserve assets, strengthen the naira, and stimulate domestic industrial growth. With reserves now estimated at around $3.5 billion, gold is increasingly serving as a bridge between local miners, domestic refiners, and global bullion markets. The approach also aligns with a wider African trend of leveraging gold reserves to enhance financial stability and reduce exposure to external economic shocks.
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Nigeria’s gold reserve expansion is being implemented through the National Gold Purchase Programme (NGPP), a framework designed to allow the country to accumulate reserve assets without drawing down existing foreign exchange reserves. Under the programme, gold mined locally by licensed operators is refined to international LBMA standards and purchased by the CBN in naira at global benchmark prices. This effectively converts a domestic resource into a recognised monetary asset.
According to CBN Governor Olayemi Cardoso, the programme serves as a hedge against inflation and currency volatility while preserving foreign exchange resources. At the same time, the initiative adheres to international responsible sourcing frameworks such as the OECD Due Diligence Guidelines and the London Principles, reinforcing Nigeria’s commitment to transparency and ethical mining practices.
Nigeria’s gold sector is beginning to show measurable progress. Official production reached 3,400 kilograms in 2023, while the Segilola Gold Mine—the country’s only industrial-scale operation—produced approximately 2.6 tonnes in 2025. Despite these gains, challenges persist. Authorities estimate that gold smuggling costs the country nearly $9 billion annually in lost revenue.
Nevertheless, efforts to formalise the sector are gaining momentum. The mining industry recorded 4.85% growth in 2024, reflecting increased regulatory oversight and improved participation by licensed operators. These developments have helped raise the CBN’s gold reserves to an estimated $3.5 billion in 2026.
A major challenge remains the dominance of artisanal and small-scale mining. More than 90% of Nigeria’s gold production originates from informal miners operating across multiple states. Integrating this vast network into the formal economy has therefore become one of the government’s most important economic priorities.
Within Nigeria’s broader economic landscape, the importance of diversification continues to grow. In 2025, the country’s GDP was estimated at approximately $285–$300 billion. Although the economy remains heavily reliant on oil revenues, the non-oil sector now accounts for more than 96% of total GDP.
In this context, gold has emerged as an important diversification asset. By strengthening monetary reserves and reducing pressure on foreign exchange demand, the metal provides an additional tool for stabilising the national currency. At the same time, formalising gold mining helps address longstanding problems of illegal trade and revenue loss.
The transformation of Nigeria’s gold sector is already producing tangible economic benefits. Domestically sourced gold now contributes directly to foreign reserves through purchases by the CBN. Because these acquisitions are denominated in naira, they reduce demand for foreign currency while supporting exchange rate stability.
Formalisation efforts have also brought thousands of artisanal miners into the legal economy. Government revenue from the mining sector has increased significantly, rising from ₦8.6 billion in 2022 to approximately ₦38 billion in 2025. In parallel, investments in domestic refining capacity are enabling Nigeria to produce LBMA-compliant bullion, strengthening the country’s position within global gold markets.
These reforms build upon Nigeria’s long mining heritage while addressing historical challenges. Gold mining in the country predates colonial rule, with commercial production reaching its peak in the 1930s. However, the discovery and rapid expansion of the oil industry in the 1970s caused the sector to decline, pushing most activity into informal operations.
Today, programmes such as the Presidential Artisanal Gold Mining Development Initiative (PAGMI) and the National Gold Purchase Programme aim to reverse this trend. Their objectives include formalising artisanal miners, reducing illegal trade estimated at billions of dollars annually, and establishing sustainable industry standards.
Experts from organisations including the World Gold Council, KPMG, and the Africa Finance Corporation have described these reforms as potentially transformative for Nigeria’s non-oil economy. However, they also caution that several challenges must still be addressed. These include security concerns in mining regions, environmental damage caused by mercury use, and persistent infrastructure deficits.
Looking ahead, Nigeria is positioning itself for a more prominent role in Africa’s gold value chain. The government is investing in refining capacity, expanding exploration programmes—supported by more than $630 million in funding—and integrating mineral resources into central bank reserve management strategies.
In addition, policymakers are discouraging the export of unprocessed minerals while actively courting international investment from the Middle East and Asia. The long-term goal is to transform Nigeria into a West African bullion trading hub.
As global central banks increase their gold holdings amid economic uncertainty, Nigeria’s model—linking artisanal miners, domestic refiners, and monetary policy—offers an innovative blueprint for resource-rich economies. If successfully implemented, it could enable Africa’s largest economy to emerge not merely as a raw materials exporter, but as a leading player in the global gold value chain.
