Nigeria Loses $9 Billion a Year from Illegal Gold Mining

A debate in the Nigerian Senate has highlighted the severe economic problem that illegal mining poses for the country. Estimates suggest that the country stops entering its offers at about 9,000 million dollars annually due to the smuggling of illegally extracted gold in its deposits.

The Nigerian government wants to take measures to control this illegal gold production.

According to local media RipplesNigeria, the Nigerian Senate has requested the government to investigate the alleged loss of profits equivalent to about 9,000 million dollars annually, due to the illegal extraction and smuggling of gold.

The Senate of Nigeria required the Nigerian Executive to increase actions to reduce the impact of illegal gold mining. In turn, causing the loss of income derived from these practices. Additionally, it recommended the creation of mining farms aimed at supporting miners and artisans.

The Committee on Solid Metals, Steel Development, and Metallurgy of the Senate itself plan to carry out the investigation on illegal gold mining and its impact on mining profits.

The decision stemmed from a proposal by Senator Orji Uzor Kalu. Sources revealed Nigeria lost nearly $54 billion due to illegal gold mining and smuggling between 2012 and 2018.

Most of the country’s gold reserves are unexploited

Illegal gold mining is one of the main problems facing the gold industry on a global scale. The uncontrolled extraction of gold by illegal miners causes enormous economic damage. This is due to intermediaries who smuggle gold to be refined and sell it in other countries. 

According to Kalu, combating illegal mining in Nigeria would create up to 250,000 new jobs and generate revenue for the government, worth more than 500 million dollars annually. The current gold reserves level is estimated at 200 million ounces (6,220 MT); most of them are unexploited. It is vital to develop sustainable programs that attract more and more investment in extraction areas.

The studies carried out to confirm the existence of important gold reserves in many states of the country.

Last June, Nigerian President Muhammadu Buhari pointed out that his government aimed to earn some 500 million dollars annually thanks to gold mining. It would allow diversifying the income of a country that mainly depends on exports of oil. However, the price of the commodity fell significantly in April due to the pandemic.

According to data from the Gold Focus 2020 report, Nigeria produced 14 tons of gold in 2019. That figure places the country well below other African countries with smaller territorial extension.