Economy

Can Gold Mining Offer Nigeria an Unexpected Lifeline?

Published

4 years ago

05/04/2022

Business Post Contributor

By Lukman Otunuga

Can Gold stand toe-to-toe with Black Gold for Nigeria’s economy?

Geopolitical tensions have triggered explosive levels of market volatility and uncertainty. These unfavourable market conditions continue to accelerate the flight to safety with gold by roughly 6% since the start of 2022.

Amid the negative themes bombarding global sentiment, gold remains a bright spot and high upside thanks to its status as an inflation hedge.

The precious metal was trading around $1935 last week and is expected to remain volatile over the next few days amid key economic reports, the Ukraine-Russia conflict, and China lockdowns among other factors.

Gold buoyed by fundamental factors

Several factors are supporting gold prices.

Safe-haven buying triggered by fears over the Ukraine-Russia conflict has boosted the metal’s spot and futures prices. In recent events, Russian and Ukrainian negotiators are set to resume face-to-face talks in Turkey this week.

While signs of both sides finding a middle ground could boost risk sentiment, further delays or disagreements could rattle financial markets. Soaring Covid-19 cases in China have also added to the risk-off mood and overall uncertainty. With commodity prices soaring on supply-side fears, concerns over stagflation and its consequences on the global economy continue to weigh on investor confidence.

On the flipside, expectations over the Federal Reserve adopting an aggressive approach toward interest rates could hit zero yielding gold. An appreciating dollar and rising bond yields may compound the precious metal’s woes, creating obstacles for bulls down the road.

Nigeria’s Gold reserve….

Back in 2020, Nigeria refined its own reserve gold bar and paid N268 million for the 12.5kg bar to start a central bank stock. When considering the previously mentioned factors stimulating the appetite for gold, this move was a welcome development for Nigeria as it diversified away from oil reliance.

Indeed, if cultivated well, gold mining and trading possessed a frightening potential to generate more revenue than crude oil for Nigeria.

Fast forward to today, Nigeria still remains in an ongoing quest to tap the potential of the gold mining sector. Since the massive hype in 2020 which created awareness on access to the markets, it’s been a tale of uncertainty and negativity. Illegal mining activities have become a major plague in the sector, with solid minerals being smuggled out of the country – resulting in a loss of potential government revenues.

The numbers do not lie…

The underlying math’s in Nigeria’s Gold market show strong potential.

Nigeria’s Gold reserve is estimated at 200 million metric tonnes, according to the Nigeria Mining Growth Roadmap. Meanwhile, Trading Economics places Nigeria as the sixth largest country with Gold deposits in Africa, with an average of 21.37 tonnes from 2000 to 2020, reaching an all-time high of 21.46 tonnes during the first half of 2021. The nation’s current estimated gold reserves are over 200 million ounces, most of which have not been exploited.

Back in 2020, the newly-regulated gold mining sector was expected to create 250,000 new jobs and provide the Federal Government with an additional estimated annual revenue of $150 million in taxes, $25 million in royalties, and $500 million in foreign exchange reserves. It remains to be seen whether these predictions will match reality.

Should the developments in the gold mining sector improve, this could help boost investor sentiment against external risks in the form of geopolitical tensions and oil price volatility among many other factors.

In a perfect world, a well-managed diversification into precious metals mining and building a national gold stock could support the CBN’s foreign exchange reserves in the longer term. But we do not live in a perfect world. Negative news around illegal smuggling and violence around the sector have hit the sector’s reputation. However, there is still hope if government regulations instil long-term trust and credibility -especially when factoring in the sector’s strong potential.

Lukman Otunuga is the Senior Research Analyst at FXTM

Economy

Xenergi in Talks to Acquire 51% Stake in Premier Paints

Published

7 hours ago

17/12/2025

Aduragbemi Omiyale

By Aduragbemi Omiyale

One of the paint makers in Nigeria, Premier Paints Plc, is currently in talks with a new investor, Xenergi Limited, for the purchase of 51 per cent stake in the company.

Xenergi Limited intends to acquire shares of Clover Global Resources Limited and TGHL Capital Limited in the organisation.

Business Post gathered that the new investor will buy 39.02 per cent from Clover Global Resources Limited and 15.20 per cent from TGHL Capital Limited.

The deal, according to a regulatory notice issued on Tuesday on the Nigerian Exchange (NGX) Limited, will involve about 63 million shares of Premier Paints.

At the current share price of the paint producer, this should be about N630 million as it closed at N10.00 per unit on NGX on December 16, 2025.

“Subject to obtaining required regulatory approvals, the transaction is expected to close before January 31, 2026.

“The company will continue to inform the public of the progress of the transaction,” the disclosure signed by the company secretary, Alozie Nwokoro, said.

Economy

Naira Trades Flat Across FX Market Windows as CBN Moves to Ease Pressure

Published

9 hours ago

17/12/2025

Adedapo Adesanya

By Adedapo Adesanya

The Naira was flat against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Tuesday, December 16, retaining the previous closing value of N1,451.82/$1.

In the same vein, the local currency saw no movement against the Pound Sterling and the Euro in the spot market during the session at N1,943.98/£1 and N1,705.74/€1, respectively.

Also, the Nigerian Naira remained unchanged in the black market yesterday at N1,475/$1 and was N1,460/$1 at the GTBank forex counter.

The Central Bank of Nigeria (CBN) has strengthened US Dollar supply with $250 million to authorised dealer banks at the official window cumulatively as foreign portfolio investors, exporters and non-bank corporate supply dripped.

The spread between official and other non-regulated markets decreased to N30.59$/1 from N44.57/$1, from the previous week, research subsidiary of Coronation Merchant Bank Limited said in a report.

FX analysts said foreign exchange inflows through the Nigerian Foreign Exchange Market decreased to $716.3 million from $844.70 million in the previous week , a 15 per cent drop in a week.

Foreign portfolio investors accounted for the highest share of inflows at 32.98 per cent, followed by exporters at 30.84 per cent, the CBN (17.36 per cent), Non-bank Corporates (16.94 per cent), others (0.72 per cent) and Individuals (0.63 per cent).

On Monday, Nigeria’s headline inflation rate eased to 14.45 per cent in November 2025, down from 16.05 per cent recorded in October, according to the latest Consumer Price Index (CPI) report released by the National Bureau of Statistics (NBS), representing a decrease of 1.6 percentage points month-on-month and marks a significant moderation compared to the same period last year.

As for the cryptocurrency market, there was some recoveries after overall capitalization falling below $3 trillion for the third time in a month. Large-cap assets, particularly those with Exchange Traded Fund (ETF) exposure, are experiencing selling pressure as institutional investors reassess risk.

Ripple (XRP) appreciated by 1.5 per cent to $1.92, Litecoin (LTC) expanded by 1.5 per cent to $78.91, Dogecoin (DOGE) rose by 0.8 per cent to $0.1308, Solana (SOL) went up by 0.4 per cent to $127.60, Binance Coin (BNB) grew by 0.3 per cent to $865.40, and Bitcoin (BTC) gained 0.2 per cent to sell at $86,735.17.

On the flip side, Cardano (ADA) depreciated by 1.0 per cent to $0.3802 and Ethereum (ETH) slumped by 0.4 per cent to $2,935.85, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) were flat at $1.00 each.

Economy

Stock Investors’ Portfolios Swell N14bn as Index Rises 0.01%

Published

9 hours ago

17/12/2025

Dipo Olowookere

By Dipo Olowookere

A marginal 0.01 per cent rise was recorded by the Nigerian Exchange (NGX) Limited on Tuesday. This was different from the flattish mode of the market the previous day.

Investor sentiment remained bullish as Customs Street finished with 31 price gainers and 26 price losers, implying a positive market breadth index.

Aluminium Extrusion topped the gainers’ log after it improved its price by 10.00 per cent to N9.35, Guinness Nigeria appreciated by 9.98 per cent to N263.40, Multiverse expanded by 9.95 per cent to N12.15, MeCure Industries also soared by 9.95 per cent to N45.85, and Sovereign Trust Insurance advanced by 9.89 per cent to N4.11.

Conversely, Haldane McCall led the losers’ chart after it shed 9.93 per cent to settle at N3.72, Veritas Kapital lost 9.09 per cent to close at N1.60, LivingTrust Mortgage Bank also declined by 9.09 per cent to N3.50, and Linkage Assurance depreciated by 5.71 per cent to N1.65.

During the trading day, the All-Share Index (ASI) went up by 21.23 points to 149,459.11 points from the previous day’s 149,437.88 points and the market capitalisation increased by N14 billion to N95.281 trillion from N95.267 trillion.

Yesterday, traders transacted 1.0 billion equities for N21.8 billion in 23,701 deals compared with the 553.1 million equities valued at N13.3 billion traded in 28,907 deals on Monday, representing a decline in the number of deals by 18.01 per cent, and a surge in the trading volume and value by 80.80 per cent and 63.91 per cent apiece.

Access Holdings traded 385.8 million stocks worth N7.7 billion, Champion Breweries transacted 111.8 million shares valued at N817.8 million, Sterling Holdings exchanged 85.5 million equities for N589.9 million, FCMB sold 74.7 million shares valued at N791.5 million, and First Holdco transacted 51.9 million equities worth N1.8 billion.