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A bill proposing the use of gold by the Central Bank of Nigeria (CBN) to curb inflation and stabilise the naira has passed second reading in the senate.
Natasha Akpoti-Uduaghan, a senator of the Peoples Democratic Party (PDP) representing Kogi Central, proposed the ‘Gold Reserve Bill’ to formalise the bank’s role in the gold industry.
The bill proposes a series of policies that would designate the bank as the off-taker of all gold produced in the country.
The senator proposed setting up a gold reserve authority which will ensure the regular supply of gold to the CBN for the maintenance and management of the Nigerian gold reserve.
The bill said the CBN governor will chair the gold reserve management committee.
Part of the bill said the objectives of the CBN will be to “ensure the stability of the national economy by using gold reserves as a financial anchor, providing a secure foundation for currency value and overall economic health”.
It also said CBN will manage Nigeria’s gold reserves to mitigate inflation and deflation risks, thereby contributing to stable currency values and price levels in the country.
Another objective, according to the bill, is CBN will utilise the “gold reserves to support and stabilize the national currency in the foreign exchange market, ensuring a favorable position in international trade and finance”.
In the draft, the lawmaker proposed that CBN shall ensure, at “all material times and from time to time,” that its external assets consisting of gold coins or bullion are not less than 30 percent of its total external reserve.
Also, the bill seeks to exempt the importation of plant, machinery, equipment and accessories specifically and exclusively for gold mining operations from customs and import duties.
Since taking office in May 2023, President Bola Tinubu has sought to transform Nigeria’s mining industry to attract investors.
On June 23, Dele Alake, minister of solid minerals development, presented refined gold bars to the president, saying the first transaction of the commodity added $5 million to Nigeria’s external reserves.
Alake said the refined gold will be sold to the CBN to bolster foreign reserves.
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