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Regulating Artisanal Gold will Help Diversify Nigeria’s Economy

Nigeria plans to stem illegal gold exports worth hundreds of millions of dollars a year to boost the country’s foreign reserves. The Presidential Artisanal Gold Mining Development Initiative aims to regulate production by informal miners that currently provides no income to the state. As much as 18 tons of gold leaves Nigeria illegally every year and is shipped to Dubai. The program plans to shift most of that production, which is extracted by so-called artisanal miners and sold to middlemen, into a supervised supply chain that ends with bullion in a central-bank vault. Persuading the informal gold-mining industry to come within the orbit of state oversight would not only generate much-needed tax revenue. It would also allow the central bank to stockpile the metal, according to the presidency. Nigeria’s gross reserves currently stand at $35.9 billion. The price of gold has soared in recent months, reaching a record $1,988.40 an ounce on Monday. At current prices, the PAGMI program could add about $500 million to foreign reserves annually, as well as contribute $150 million in taxes.