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Juliana Taiwo-Obalonye, Abuja
President Muhammad Buhari on Thursday did a virtual launch of the Presidential Artisanal Gold Mining Initiative (PAGMI) at the Council Chambers of the State House Abuja.
The president disclosed that in six years Nigeria lost $3 billion to illegal miners.
The Central Bank Nigeria (CBN) paid for and received an international standard but locally sourced 12.5kg gold bar (artisanally-mined in Nigeria) worth N268 million for its reserves.
The CBN presented a cheque for that amount to PAGMI. The gold now belongs to Nigeria’s External Reserves. With PAGMI, CBN will be able to boost gold reserves with Naira not dollars.
President Buhari said improved gold mining operations in the country will generate no fewer than 250,000 jobs and over $500 million annually in royalties and taxes to the Federal Government.
The launch was witnessed physically by Vice President Yemi Osinbajo, Secretary to the Government of the Federation Boss Mustapha, Chief of Staff to the President Prof Ibrahim Gambari, governors of Kaduna, Nasir El-Rufai; Kebbi, Bagudu Atiku; Osun, Gboyega Oyetola; and Deputy Governor of Zamfara, Mahdi Gusau; Minister of Mines and Steel Development Olamilekan Adegbite, Minister of State, Mines and Steel Development, Dr Uchechukwu Ogah, Central Bank of Nigeria Governor Godwin Emefiele and the Executive Secretary of the Solid Minerals Development Fund (SMDF), Hajiya Fatima Shinkafi.
Others joined virtually from their various offices.
The Central Bank Nigeria (CBN) paid for and received the international standard but locally sourced 12.5kg gold bar (artisanally-mined in Nigeria) worth N268 million for its reserves.
The CBN presented a cheque for that amount to PAGMI. The gold now belongs to Nigeria’s External Reserves. With PAGMI, CBN will be able to boost gold reserves with Naira, not dollars.
President Buhari said improved gold mining operations in the country will generate no fewer than 250,000 jobs and over $500 million annually in royalties and taxes to the Federal Government.
He also reaffirmed his administration’s commitment to establishing gold refineries in Nigeria.
Buhari said this laudable initiative would support efforts at creation of jobs for Nigerians, diversifying the revenue base, and improving foreign exchange reserves.
Reiterating the determination of the Federal Government to combat illegal mining activities, the President expressed concern that Nigeria lost close to $3 billion from 2012 – 2018 due to illegal smuggling of gold.
‘With the implementation of the PAGDMI scheme which will result in the set-up of accredited gold buying centres across key mining areas, artisanal miners and SMEs engaged in mining will be able to capture the value of their work.
‘These operations will help in diversifying our revenue base. The sale of gold by artisanal miners and SMEs at accredited centres will help the government in realising royalties and taxes from the sale of these assets.
‘These developments will also help in improving our foreign reserves by enabling the Central Bank of Nigeria to increase the amount of gold in its reserves.
‘These gold assets which will be purchased in Naira, will not only help to bolster our international reserves, it will also provide a hedge against inflation and other economic volatilities associated with foreign currencies that are held in our reserves,’ he said.
President Buhari noted that in addition to the potential revenue gains that will occur from mining operations, efforts are being made to enable the setting up of gold refineries in Nigeria.
He expressed optimism that these measures would lead to the creation of additional job opportunities across the gold value chain and also help the nation capture the additional value created from the gold refining process.
On environmental degradation, President Buhari pledged that the Federal Government would pay close attention to safety and environmental measures to protect workers and the environment.
Buhari also used the occasion to commend all stakeholders involved in the PAGMI for their painstaking efforts in developing a programme aimed at improved sourcing and refining of high-quality gold bars, derived from minefields in Nigeria.
He recalled that the PAGMI, which was launched in 2019, was well-timed, considering the impact of COVID-19 on the global economy and indeed on the Nigerian economy.
Buhari said the impact of COVID-19 and the containment measures designed to slow the spread of the virus, had led to a slowdown in global growth, which is projected to decline into negative territory for the first time since the Great Depression of the 1930s.
‘It has also led to a 40 per cent drop in crude oil prices. In Nigeria, the drop in crude oil prices has had a significant impact on government revenue, as well as on our foreign exchange earnings.
‘In responding to this challenge, it is therefore paramount that we strengthen our efforts at implementing policies and programs that will enable a greater diversification of the Nigerian economy.
‘Enabling investment in the Solid Mineral sector is a key part of the government’s economic diversification program.
‘Given our current estimated gold reserves of over 200 million ounces, most of which have not been exploited, developing sustainable programmes that will catalyse increased investment in the extraction and refining of gold sourced from mines in Nigeria, is indeed vital,’ he said.
Emphasising the benefits of the PAGMDI, President Buhari explained that it will support job creation efforts particularly for artisanal miners, by providing them with a guaranteed offtake by the Central Bank of Nigeria.
Furthermore, he said efforts are being made to support artisanal miners in improving the standard of the gold that will be sold to the apex bank, in order to ensure that they meet international benchmarks.
According to him, the initiative will enable the deployment of financing schemes that will help miners improve on the quality of their mining operations.
‘The gold buying program by the Central Bank will ensure that artisanal miners are no longer subjected to the volatility in gold prices that occurs in the absence of credible off-takers, which has often led to a significant loss in the value of gold sold by miners, as well as in encouraging illegal smuggling,” he said.
Bagudu on his part said the programme will eliminate all illegal mining and insecurity in the north.
According to him, ‘many states including Kebbi have people in the artisanal gold mining sector for decades but this is the first time they are being energized by a national programme, put together by the solid Mineral development the ministry and supported by a steering committee to include those artisanal miners that are eager to do their activities, but they have been doing so illegally, exposed to health hazards, damage to the environment and because of illegality it brings insecurity.
‘So this energizes state governors, gold-producing communities across Nigeria and I believe this is an initiative that will see us through more individually and collectively in this gold production and ensure that people benefit from it.
‘Will this contribute to ending insecurity? Yes, certainly. I have said that already most of the Artisanal miners because they are illegal and because they are producing something that is very precious and easy to transport, so it attracts criminals and criminality but the PAGMI process is now for formalising and recognising them, providing them protection so that whosoever wants to participate, will register and get trained and participate and do it legitimately. This will have a significant effect on insecurity in some places of the country particularly where mineral production including gold is taking place because it will provide them with safety and formalisation, they are no longer criminals, they are no longer doing it illegally and the PAGMDI scheme is spending money in providing security for their operations.’
Adegbite on this part said the ministry has established a security outfit to protect the mining sites and workers in future.
Emefiele said Nigeria has moved from talking about diversification to actually diversifying her economy.
He said: ‘As you all know, for several years and decades we have been talking about the need to diversify the revenue base of the Nigerian economy and we will say that today this has been actualised in the sense that other than receiving dollar revenue from proceeds of the sale of crude oil, we have today received into our reserves through the purchase of this 12.5kg purified gold bar into our reserves, we have today received gold into our reserves. Like you all know, gold is valued in the international market in dollars so what does that mean? This gold is valued at dollar sum that will go into our reserves and what does that also mean? That for those who feel that the only way they can analyse Nigeria is to say what is the price of crude, is the price of crude high or is the price of crude low, they will now begin to see that at this time when the price of crude is low, the price of gold is rising, that the Nigerian economy remains strong, remains resilient to withstand the exogenous shocks that we see around today. We seize this opportunity to assure our friends both locally and internationally to say that the Nigerian government supported by the monetary authorities is doing everything possible to diversify the base of the Nigerian economy and in the coming weeks and months, Nigerians and the world will see more that is going to be done in improving the output from our agricultural sector, from the manufacturing sector, doing everything to make it easy for goods to move from farms to market in Nigeria.
‘All these are being done to ensure that the Nigerian economy remains resilient to withstand any shock that may come our way.’
Shinkafi in her remarks said that with the launch, the vision is now established for the country because she now knows where she is going.
She said: ‘We have started a good journey towards improving the economy and we are moving at a very fast speed.
‘I hope that this will translate into a better life, most importantly for the households that we intend to impact in terms of making better standards of living for individual families that we are supporting directly and indirectly with the artisanal miners.
‘Also, it is very important that I mention that the private sector should not feel that this is going to crowd them out because the government intends to have that persona in terms of our project. “So, this is supposed to encourage private-sector-led investment. They have a space to participate in PAGMI and the laws and regulations are there. We will sensitise people together with the Ministry and the States, who have been very supportive as well.
‘So, in terms of what next, we hope to expand this and make the success of this pilot even bigger than this.’
