Gold market in Nigeria
A new deal between Heritage Bank and the Dukia Gold and Precious Metals Refining Company Limited will make it easier for small-scale miners to access the global gold market. The Nigerian gold market is estimated to be worth PS4 billion and has excellent prospects for profitability. This was the reason the bank decided to take a risk in the sector and partner with a local gold refiner. The partnership is a win-win for all parties involved.
Imports from Italy and the United Arab Emirates were the fastest growing in 2016, whereas the amount of imports from other countries was the lowest. The United Arab Emirates accounted for the largest percentage of imports to Nigeria, while the second largest supplier of gold to Nigeria was Italy. However, the pace of growth in Nigeria’s gold market has been sluggish. The most recent figures show a downward trend in gold imports.
While the Naira currency is the legal tender in Nigeria, it has many shortcomings, making it an unattractive option for those wishing to beat inflation. Unlike gold-backed bonds, paper currency is subject to inflation, meaning that its value diminishes over time. Hence, a N500 coin today will only buy you three bananas in 10 years, but can buy six today. Gold is an alternative currency and will help to protect you from this ailment.
Although the government has tried to rectify the problems, some stakeholders have accused the government of neglect. In the case of the MAN, president Kabiru Kankara, whose organization was not included in the planning process, the intervention of the government is much needed, and he applauded the government’s efforts. In addition to Kano, the state chapter chairperson of MAN, Yahya Kulo, has called for greater transparency in government decisions and collaboration to avoid further problems in the gold market.
Aside from being a profitable industry, Nigeria has an abundance of mineral resources. Gold, for example, is a national strategic mineral, and the country has an estimated 200 metric tons of proven reserves. As one of Nigeria’s most precious minerals, the Nigerian gold market has gained popularity in the region. In Dubai’s gold souk, “Zamfara gold” has been named after the state where it was mined.
The price of gold in Nigeria is available in multiple units. The price of gold in Nigeria is quoted per gram, kilogram, tola, and ounce. The price changes are shown in Nigerian Naira (NGN).
Exchange-traded funds are another way to get involved in the gold market. Although not regulated in Nigeria, they allow investors to trade in gold on margin, thereby increasing their risk and profit potential. However, CFDs are risky and are not suitable for regular investors. A good way to get started with the market is to find a foreign licensed forex broker and invest in gold through them. In the meantime, the Nigerian Gold Exchange plans to introduce commodity derivatives in the future.
