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How can Nigeria structure its gold market?
With oil prices reacting to global headwinds, how can Nigeria structure its gold market to attract the needed investment and revenue? Nere Emiko, the Vice Chairman of Kian Smith Refinery, joins CNBC Africa for this discussion.
Tue, 23 Aug 2022 14:49:26 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- The progress of Nigeria's gold market, including the establishment of Kian Smith Refinery and the entry of key players like Segilola Gold Mines, highlights the country's growing presence in the global gold industry.
- Nigeria's potential to leverage gold as a solution to foreign exchange challenges is a key focus, with the promotion of LBME-produced gold as a means to reduce currency pressures.
- The need for structural reforms in the gold market, particularly in addressing policy issues related to taxation and VAT, is crucial for unlocking the market's full potential and driving economic growth.
Nigeria's gold market is gaining momentum as the country aims to attract investment and increase revenue amidst global economic challenges. Nere Emiko, the Vice Chairman of Kian Smith Refinery, shared insights on the progress of the industry and the potential for growth. In a recent interview, Emiko highlighted the significant developments in Nigeria's gold market since the establishment of the refinery in 2018. Despite facing challenges such as the COVID-19 pandemic, the refinery began operations in July 2020 and has since expanded its presence in key cities like Kano, Burkina Faso, Dakar, and Lagos. Emiko emphasized the rise of key players like Segilola Gold Mines in Osun State, which has become one of Nigeria's largest mining companies, producing over a ton of gold since late last year. The Lagos Commodity Futures Exchange recently introduced gold trading, further enhancing Nigeria's position as a major gold producer in Africa. Emiko also announced the launch of Sanu Coin, a platform for trading LBME coins and bars. The increasing interest in gold is not limited to Nigeria, as other countries like Ghana, Zimbabwe, and India are also exploring opportunities in the gold market. Emiko discussed the potential of gold to alleviate foreign exchange challenges in Nigeria. He pointed out that gold is traditionally undervalued as a financial instrument in Africa. By encouraging Nigerians to invest in LBME-produced gold, Emiko believes that the demand for foreign exchange can be reduced, providing a sustainable solution to currency pressures. Emiko highlighted the importance of structuring the gold market in Nigeria to unlock its full potential. He addressed the policy issues surrounding taxation, royalties, and VAT, noting that Nigeria's royalty rates are competitive at around 3%. However, challenges remain in terms of VAT and import duties on LBME gold, which are not levied in other regions like the UAE and the EU. Emiko expressed optimism that the Central Bank is addressing these discrepancies to foster a more favorable regulatory environment for the gold market. The emergence of institutions like the Lagos Commodity Futures Exchange is instrumental in providing a structured platform for gold trading in Nigeria. Emiko underscored the significance of initiatives like Sanu Coin and partnerships with financial institutions like Union Bank to promote local gold production and enhance market transparency. Overall, the evolving landscape of Nigeria's gold market presents opportunities for economic growth and investment, positioning the country as a key player in the global gold industry.
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