Central bank taps domestic mining sector to strengthen external reserves and reduce reliance on foreign currency…..
The Central Bank of Nigeria has added domestically sourced gold refined to international standards to the nation’s foreign reserves, pushing its total gold holdings to approximately $3.5 billion.
The apex bank disclosed this in a statement on Wednesday, noting that the newly acquired bullion meets the Good Delivery standards set by the London Bullion Market Association, a global benchmark for quality and integrity in the gold trade.
According to the bank, the gold was sourced locally and aggregated through the National Gold Purchase Programme, which is managed by the Solid Minerals Development Fund. The initiative works with local miners across Nigeria while adhering to internationally recognised responsible sourcing frameworks.
The CBN explained that the programme aligns with the due diligence guidelines of the Organisation for Economic Co-operation and Development and the sourcing principles developed by the World Gold Council.
Speaking earlier at a one-day workshop focused on strategies to maximise the economic benefits of Nigeria’s mineral resources, the Governor of the CBN, Olayemi Cardoso, said the central bank purchased the gold in naira, using prices linked to international LBMA benchmarks.
Cardoso explained that the arrangement allows the monetary authority to build up the country’s reserve assets without drawing on foreign currency, while simultaneously strengthening Nigeria’s gold stockpile.
According to him, the strategy supports the broader goal of improving macroeconomic stability and enhancing the overall quality of the country’s external reserves.
The CBN governor also pointed out that central banks around the world are increasingly turning to gold as a strategic asset, particularly in response to rising geopolitical risks, inflationary pressures and financial market volatility.
He said acquiring locally refined bullion not only strengthens Nigeria’s reserve buffers but also supports the development of the domestic mining sector, creating opportunities across the gold value chain.
Cardoso noted that the workshop, organised by the bank’s Corporate Secretariat and Reserve Management Departments, served as a platform to engage stakeholders across the mining industry. Discussions focused on unlocking the full economic potential of Nigeria’s mineral resources while addressing existing challenges in the sector.
He stressed that many central banks are prioritising economic resilience in the face of persistent global uncertainty, with gold regaining prominence in reserve portfolios as a reliable hedge against inflation and market instability.
The Executive Secretary of the Solid Minerals Development Fund, Fatima Shinkafi, said the successful delivery of LBMA-standard gold highlights the effectiveness of the fund’s supply chain due diligence and formalisation framework.
Also speaking at the event, Kurtulus Taskale-Diamondopoulos, Director of Central Banks and Public Policy at the World Gold Council, praised the design of Nigeria’s Gold Purchase Programme. She noted that its alignment with the London Principles for responsible artisanal and small-scale gold sourcing could serve as a model for other countries seeking to establish similar initiatives.
Meanwhile, the President and Chief Executive Officer of the Africa Finance Corporation, Samaila Zubairu, reaffirmed the corporation’s commitment to supporting the growth and formalisation of Nigeria’s mining sector.
Zubairu emphasised the need for better geological data and stronger mineral processing infrastructure to attract investment, improve gold recovery rates and reduce environmental impact across mining communities.
Similarly, the Executive Vice Chairman of Kian Smith Gold Company, Nere Emiko, called for greater transparency and investment in exploration activities, noting that Nigeria’s current gold reserves remain relatively modest compared to those of many peer economies.
She urged policymakers to accelerate efforts aimed at building strategic reserves and establishing commodity exchanges that can help strengthen the sector.
The CBN said the Domestic Gold Purchase Programme forms part of a broader strategy to improve the composition of Nigeria’s external reserves, reduce vulnerability to global shocks and position the country’s mineral resources as a key pillar of long-term economic stability.
Earlier this year, Cardoso disclosed that Nigeria’s net foreign exchange reserves rose sharply to $34.8 billion at the end of 2025, up from $3.99 billion recorded at the end of 2023, reflecting what he described as a significant strengthening of the country’s external buffers.
During the same period, gross external reserves increased from $40.19 billion in 2024 to $45.71 billion in 2025, while the figure reached $50.45 billion as of February 16, 2026.
Gross reserves represent the total stock of foreign assets held by the central bank including foreign currencies, gold and other external assets while net reserves exclude short-term liabilities, providing a clearer measure of the funds readily available to defend the naira and meet Nigeria’s external obligations.
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