Nigeria is looking to end illegal gold exports in the hope of capturing the millions of dollars lost each year through the process to shore up its international reserves, Bloomberg reported on Tuesday.
Fatima Shinkafi, the Presidential Artisanal Gold Mining Development Initiative (PAGMI)’s Executive Secretary said government’s plan will regulate exploitation actions by artisanal miners who currently provide no revenue to the state.
18 tons of gold leaves the shores of Africa’s biggest economy annually without government’s approval, ferried across the Atlantic to Dubai, Shinkafi said in an interview.
Among PAGMI’s grand ambitions is a conversion of most of the production, which is done by the informal miners, into an orderly chain of supply that ends with bullion van in a central bank vault.
Regulating informal production will help broaden Nigeria’s oil-dependent economy at a time when crude prices are straining President Muhammadu Buhari’s government aspiration to look away from the commodity as the major fiscal source.
Convincing the artisanal gold-mining sector to come under government’s watch would provide the much-needed tax revenue and enable the Central Bank of Nigeria put away the metal for a rainy day, according to the presidency.
Nigeria looks up to oil proceeds for 90 per cent of its export earnings and around half of government’s income.
The Buhari administration has been pressured by the recent oil crash to weaken the naira as a plunge in revenue shrank foreign reserves even though oil prices have rallied and steadied in the fallout of the record oil crash in March.
Nigeria’s total reserves, at the moment, sum up to $35.9 billion.
Gold’s price has been on a steady rise lately, scaling a historic $1,988.40 per ounce on Monday. PAGMI is capable of contributing roughly $500 million every year to foreign reserves while also generating $150 million in taxes, Shinkafi said.
‘That’s a hell of an incentive for a country that is earning mostly from oil and agriculture.’
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