Nigeria Adds $3.5B Local Gold to Foreign Reserves

The Central Bank of Nigeria (CBN) has officially added locally sourced, internationally refined gold worth $3.5 billion to the nation’s foreign reserves. This is a significant step in Nigeria’s efforts to diversify its external buffers and strengthen economic stability.

The delivery of the gold, refined to London Bullion Market Association (LBMA) Good Delivery standards, marks a first for Nigeria. It is the global benchmark for quality bullion.

It also places the country among a growing group of emerging economies looking for alternatives to traditional foreign exchange holdings.

Domestic Gold Meets Global Quality

The gold was gathered by the Solid Minerals Development Fund (SMDF) under the National Gold Purchase Programme (NGPP). This government initiative aims to formalize Nigeria’s gold value chain by working with artisanal and small-scale miners.

At a workshop focused on maximizing the economic benefits of Nigeria’s mineral resources, CBN Governor Olayemi Cardoso explained that the transaction was set up to preserve external liquidity while boosting reserves.

“By purchasing domestically refined gold without deploying foreign currency, the transaction enhances reserve accretion and supports broader macroeconomic stability objectives,” Cardoso said, according to reports. He mentioned, “This approach reflects the evolving global reserve management environment and Nigeria’s readiness to adapt to economic realities.”

The central bank stated it bought the gold in naira at prices linked to LBMA benchmarks. This design protects scarce foreign currency from depletion and lowers reliance on traditional reserve assets in hard currencies like the U.S. dollar.

Responsible Sourcing and Standards

The NGPP incorporates responsible sourcing practices that follow the Organization for Economic Co-operation and Development (OECD) Due Diligence Guidelines and the World Gold Council’s London Principles. This ensures traceability and compliance with global standards.

Hajiya Fatima Umaru Shinkafi, Executive Secretary of the SMDF, emphasized the delivery’s importance for Nigeria’s mining sector. She stated that this achievement “demonstrates that Nigeria’s local mining sector can meet international quality standards while contributing meaningfully to national reserves.”

Kurtulus Taskale Diamondopoulos, Director of Central Banks and Public Policy at the World Gold Council, praised the NGPP structure for aligning closely with global best practices for responsible gold sourcing.

Economic and Strategic Impact

Analysts believe this move could mark a broader change in how Nigeria manages its strategic assets. By increasing gold reserves through local sources, policymakers aim to lessen vulnerabilities related to foreign exchange fluctuations and external shocks. These are issues that have heavily impacted emerging markets in recent years.

Samaila Zubairu, President and CEO of the Africa Finance Corporation, stressed the need for better processing infrastructure and reliable geological data. He noted that these investments would not only support reserve growth but also attract long-term capital into the sector.

Meanwhile, Nere Emiko, Executive Vice-Chairman of Kian Smith Gold Company, called for increased investment in exploration and transparency. She highlighted that Nigeria’s gold reserves are still relatively small compared to those of peer economies.

A Broader Reserve Strategy

This development complements other signs of strengthening external buffers. Recently released CBN data indicates Nigeria’s net foreign exchange reserves rose to $34.8 billion by the end of 2025. It supports improved external fundamentals and policy reforms aimed at stabilizing the currency market.

As global central banks reassess reserve compositions amid geopolitical uncertainty and market volatility, Nigeria’s venture into locally sourced gold. It meets international standards, thus positioning the country as a potentially influential model for other resource-rich developing economies.