Olayemi Michael Cardoso, CBN Governor
CBN fortifies reserves with $3.5bn in locally sourced gold
The Central Bank of Nigeria (CBN) has bolstered its foreign reserves by acquiring responsibly sourced gold refined to London Bullion Market Association (LBMA) Good Delivery standards, increasing its total gold holdings to $3.5 billion.
This initiative aims to diversify Nigeria’s external reserves and mitigate exposure to global economic shocks.
The monetary-grade gold, sourced locally and refined to international standards, was aggregated by the Solid Minerals Development Fund (SMDF) under the National Gold Purchase Programme (NGPP).
The programme integrates artisanal and small-scale miners into a formal, traceable value chain, adhering to the OECD Due Diligence Guidelines and the World Gold Council’s London Principles.
Speaking at a workshop on June 27, 2026, CBN Governor Olayemi Cardoso revealed that the apex bank acquired the gold in naira at prices linked to LBMA benchmarks.
This local currency transaction preserves foreign exchange while enhancing the quality and resilience of Nigeria’s reserve assets.
Cardoso emphasized that the approach strengthens reserve accretion without utilizing foreign currency—a strategic advantage as global central banks recalibrate their reserve compositions amid geopolitical risks, inflation volatility, and market uncertainty.
“This transaction enhances reserve accretion and supports broader macroeconomic stability objectives,” he stated, noting gold’s resurgence as a hedge against inflation and currency volatility.
The NGPP is designed as a structural reform linking Nigeria’s mineral wealth with macroeconomic management.
Cardoso highlighted the need for strategic coordination, prudent governance, and adherence to international standards to unlock the nation’s natural and human resource potential.
The initiative aligns with global trends of central banks increasing gold allocations as a hedge against systemic risk. By embedding gold purchases within a responsible sourcing framework, Nigeria ensures reserve accumulation does not compromise environmental integrity or supply chain transparency.
SMDF Executive Secretary Fatima Umaru Shinkafi described the LBMA-standard gold delivery as evidence that Nigeria’s formalisation framework is gaining traction.
She noted the achievement underscores the robustness of supply chain due diligence and efforts to integrate artisanal miners into traceable, environmentally compliant systems.
World Gold Council Director Kurtulus Taskale Diamondopoulos commended the CBN and SMDF for designing the NGPP in line with the twelve London Principles.
The partnership structure—with CBN as sole off-taker and SMDF as fiscal and supply chain manager—offers a replicable model for other nations strengthening domestic gold aggregation programmes while maintaining global credibility.
Africa Finance Corporation President Samaila Zubairu reaffirmed commitment to financing Nigeria’s mineral sector, emphasising the importance of reliable geological data, modern processing infrastructure, and environmental safeguards to attract long-term capital.
Kian Smith Gold Company Executive Vice Chairman Nere Emiko advocated for greater investment in exploration, formalisation, and commodity exchange infrastructure, noting Nigeria’s gold reserves remain relatively low compared to peer economies.
The Domestic Gold Purchase Programme is part of CBN’s broader reserve management strategy to improve asset quality and reduce exposure to external shocks.
Historically weighted toward foreign currencies and liquid securities, Nigeria’s reserves now benefit from increased gold composition—sourced and refined domestically—achieving diversification, foreign exchange preservation, stimulation of domestic industries, formalisation of artisanal mining, and enhanced environmental and governance standards.
Cardoso framed the initiative within Nigeria’s economic reform agenda, emphasising structural diversification beyond oil exports.
“Nations must strengthen buffers and leverage domestic resources wisely,” he said, noting gold’s enduring role as a store of value during turbulence.
The $3.5 billion milestone signals a scalable pathway for gold accumulation as formalisation deepens and refining capacity expands.
Industry stakeholders stress that continuous collaboration among regulators, financiers, refiners, and miners—alongside accurate production data, improved infrastructure, and strong compliance systems—will determine Nigeria’s ability to fully capitalise on its gold potential.
By aligning with OECD guidelines and London Principles, Nigeria reassures global investors of its responsible gold strategy foundations, demonstrating how monetary policy can intersect with industrial policy to achieve broader development goals.
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