In a bid to diversify her revenue source, the Federal Government of Nigeria hopes that the reform in the gold mining sector will earn the government $500 million a year in royalties and taxes and create 250,000 jobs.
This extra revenue from gold could is expected to serve as a lifeline as the coronavirus pandemic and resulting global oil price crash cut off much of the state’s income.
President Muhammadu Buhari made this known at the official presentation of locally mined gold bars by the Presidential Artisanal Gold Mining Development Initiative (PAGMDI), where he also reaffirmed his administration’s commitment to making artisanal mining legal and establish gold buying centers and tax trade of the precious metal.
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To this effect, Nigeria in February licensed two gold refineries mainly to produce gold for the Central Bank of Nigeria, CBN to hold in its reserves and also for export. The bank received its first locally-produced gold bar on Thursday.
‘‘With the implementation of the PAGMDI scheme which will result in the set-up of accredited gold buying centers across key mining areas, artisanal miners and Small and Medium Enterprises, SMEs engaged in mining will be able to capture the value of their work.
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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 CBN 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,’’ the president said.
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Recall that Nigeria has largely untapped deposits of 44 minerals including gold, iron ore, coal, tin, and zinc, in more than 500 locations, but mining makes up just 0.3% of the economy.
Nigerian authorities have said illegal mining which has led to a revenue loss of $3 billion from 2012 to 2018 is prominent in the northwest and has fuelled widespread violence which has led to the death of thousands of people in recent years.
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The extra revenues from gold could be a lifeline as the coronavirus pandemic and resulting global oil price crash cut off much of the state’s income.
On her part, the Executive Secretary of the Solid Minerals Development Fund (SMDF), Hajia Fatima Shinkafi, thanked all the various partners and stakeholders who have worked tirelessly to translate President Buhari Presidential Artisanal Gold Mining Development Initiative into reality.
