Nigeria has passed legislation making artisanal gold mining legal. This is in a development the country hopes will generate US $500m a year in royalties and taxes and create 250,000 jobs.
The incumbent Nigerian president Muhammadu Buhari, Reuters said gold buying areas would also be created as well as tax trade of the precious metal. These operations, he said, will help in diversifying Nigeria’s revenue base.
Nigerian authorities have said illegal mining, prominent in the northwest, has fueled widespread violence they attribute to “bandits”. Thousands of people have been killed in the region in recent years and swathes of the region are inaccessible. Furthermore, and according to media reports, the military has been deployed to tackle the insecurity but the conflict shows little sign of ending.
It is projected that the extra revenues from gold could be a lifeline as the COVID-19 pandemic and resulting global oil price crash cut off much of the state’s income. The move is part of efforts broadly in Africa to regulate artisanal mining which can result in illegal operations, security breaches and loss of life.
In January, the Democratic Republic of Congo (DRC) created a state-owned monopoly that aims to buy cobalt mined by its rapidly developing artisanal sector. Artisanal output soared when the cobalt price rallied in 2017 and early 2018, providing as much as 20% of the DRC’s production, according to some estimates.
Nigeria’s Buhari said the country has lost a total of US $3Bn from 2012 to 2018 because of illegal gold mining. In February, Nigeria licensed two gold refineries mainly to produce gold for the central bank to hold in its reserves but also for export. The bank reportedly received its first locally-produced gold bar on Thursday.
