The Central Bank of Nigeria (CBN) has achieved a major strategic milestone by increasing its total gold holdings to $3.5 billion.
This announcement, made by the CBN follows the delivery of a new batch of locally sourced gold, refined to the prestigious London Bullion Market Association (LBMA) Good Delivery standards.
The gold was sourced locally in Nigeria and aggregated by the Solid Minerals Development Fund (SMDF) under the National Gold Purchase Programme (NGPP). The programme integrates local miners into a responsible sourcing framework aligned with global standards.
Speaking at a workshop on strategies to maximise the economic benefits of Nigeria’s minerals, CBN Governor Olayemi Cardoso disclosed that the Bank acquired the monetary-grade gold in Naira, with pricing linked to LBMA benchmarks. This structure helps preserve Nigeria’s foreign exchange while strengthening reserves.
The Mechanics of the “Naira-for-Gold” Trade
A standout feature of this strategy is how the CBN is building its buffers without spending a single US Dollar. Under the National Gold Purchase Programme (NGPP):
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Local Sourcing: The gold is aggregated by the Solid Minerals Development Fund (SMDF) from domestic artisanal and small-scale miners.
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Naira Settlement: The CBN purchases this gold using Naira at prices linked to international LBMA benchmarks.
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FX Preservation: By paying in local currency, the bank achieves “reserve accretion” while preserving its scarce foreign exchange for other critical imports.
Strategic Impact Amid a $5,000 Gold Peak
The $3.5 billion valuation comes at a time when global gold prices have surged to record highs, surpassing $5,000 per ounce in early 2026.
- Mr. Olayemi Cardoso noted that global reserve management strategies are evolving, with central banks prioritising resilience amid geopolitical and market uncertainties. Gold is increasingly viewed as a critical hedge against inflation and volatility in the global economy.
- Kurtulus Taskale Diamondopoulos of the World Gold Council commended the collaboration between CBN and SMDF, noting that the NGPP aligns with the twelve London Principles for responsible artisanal and small-scale gold sourcing. She highlighted the partnership between the CBN as sole off-taker and the SMDF as fiscal and supply chain manager as a strong model for countries seeking to formalise and strengthen their gold sectors.
Broadening the External Buffer
The gold surge is part of a wider recovery in Nigeria’s external position. As of February 16, 2026, Nigeria’s gross external reserves stood at $50.45 billion, a 13-year high.
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Diversification: While oil receipts remain the primary driver, the $3.5 billion gold stockpile provides a “non-correlated” asset that retains value even when the US Dollar or oil prices fluctuate.
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Formalizing the Sector: By acting as a “sole off-taker,” the CBN is providing a formal market for Nigerian miners, reducing illegal gold smuggling and ensuring that mineral wealth stays within the national financial system.
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