NIGERIA’S gold reserves have climbed to about $3.5 billion, according to the Central Bank of Nigeria (CBN), following the delivery of newly refined gold that meets international standards set by the London Bullion Market Association (LBMA). The apex bank disclosed this in a statement on Wednesday, noting that the gold delivered complies with the LBMA’s Good Delivery standard, the benchmark that certifies gold bars accepted in global bullion markets.

The central bank explained that the gold was sourced locally and acquired under the National Gold Purchase Programme (NGPP), an initiative designed to strengthen Nigeria’s foreign reserve base and reduce dependence on external assets. By purchasing gold mined within the country, the CBN said it is gradually integrating Nigeria’s mineral wealth into the nation’s official reserve portfolio.

The development comes amid a strong rally in global bullion markets that has pushed gold prices above $5,000 per ounce, reinforcing the metal’s role as a safe-haven asset during periods of global economic uncertainty. Rising geopolitical risks, inflation concerns and volatility in financial markets have increased demand for gold by central banks and investors around the world.

According to the apex bank, the gold acquired under the programme was aggregated by the Solid Minerals Development Fund (SMDF), which works with artisanal and small-scale miners across Nigeria. The sourcing process, the bank said, follows a responsible mining framework aligned with international standards such as the due diligence guidelines of the Organisation for Economic Co-operation and Development (OECD) and the London Principles developed by the World Gold Council.

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Speaking during a workshop focused on strategies to maximise the economic benefits of Nigeria’s mineral resources, Governor of the CBN, Mr Olayemi Cardoso, said the central bank acquired the monetary-grade gold in naira, with prices tied to LBMA benchmarks. He explained that the arrangement enables Nigeria to increase its reserves without drawing down scarce foreign exchange (FX).

Cardoso said the structure was deliberately designed to protect Nigeria’s foreign currency holdings while strengthening the quality of the country’s reserve assets. By paying for domestically refined gold in local currency, the central bank can accumulate a globally recognised reserve asset without spending dollars.

“By purchasing domestically refined gold without deploying foreign currency, the transaction enhances reserve accretion and supports broader macroeconomic stability objectives,” the CBN governor said.

He also noted that global reserve management strategies are increasingly evolving in response to rising economic uncertainties. According to him, central banks are gradually increasing their gold holdings as the metal regains prominence as a hedge against inflation, currency volatility and financial market instability.

Cardoso added that the domestic gold purchase initiative forms part of the CBN’s broader strategy to improve the composition and resilience of Nigeria’s external reserves, while reducing exposure to external shocks.

Gold supply chain gains recognition

Commenting on the programme, Executive Secretary of the SMDF, Ms Fatima Umaru, said the successful delivery of gold that meets LBMA standards highlights the effectiveness of the agency’s efforts to formalise Nigeria’s gold mining sector. She explained that the framework adopted by the fund ensures responsible sourcing, traceability and compliance with global due diligence standards.

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Director for Central Banks and Public Policy at the World Gold Council, Ms Kurtuluş Diamondopoulos ,praised the collaboration between the CBN and SMDF. She noted that the design of the NGPP aligns with the 12 London Principles for responsible artisanal and small-scale gold sourcing, which promote transparency, environmental responsibility and ethical supply chains.

Diamondopoulos said the partnership, with the CBN acting as the sole off-taker and the SMDF managing fiscal and supply-chain processes, could serve as a model for other resource-rich countries seeking to formalise artisanal mining while strengthening national reserves.

Meanwhile, President and Chief Executive Officer of the Africa Finance Corporation (AFC), Mr Samaila Zubairu, reaffirmed the institution’s commitment to supporting the development and formalisation of Nigeria’s mineral sector. He emphasised the need for better geological data, improved mineral processing capacity and stronger infrastructure to attract long-term investment.

Zubairu noted that expanding mineral processing within Nigeria would improve gold recovery rates, reduce environmental risks and enhance the ability of the central bank to purchase locally refined bullion for reserves.

Similarly, Executive Vice-Chairman of Kian Smith Gold Company, Mr Nere Emiko, called for increased investment in exploration and improved transparency across the mining value chain. He pointed out that despite the recent progress, Nigeria’s gold reserve levels remain relatively low compared with many peer economies, highlighting the need for sustained investment and policy support to unlock the country’s full mineral potential.

Implications for Nigeria’s economy

The increase in gold reserves signals a growing shift in Nigeria’s reserve management strategy, as authorities seek to diversify away from heavy reliance on foreign currencies such as the US dollar. By building gold holdings through domestic purchases, the country can strengthen its reserve buffer without increasing external debt or draining foreign exchange.

In addition, the policy could accelerate the formalisation of Nigeria’s largely informal gold mining sector, bringing more artisanal miners into regulated supply chains, boosting government revenue and reducing illegal gold exports.

If sustained, analysts say the programme may also encourage investment in mineral exploration and refining, helping Nigeria tap into its vast but underdeveloped solid minerals sector as part of broader efforts to diversify the economy beyond oil.