Gold has become the world’s best-performing asset in 2025, rising 60 percent so far this year to an all-time high of $4,381 per ounce, as central banks around the world shift reserves from US dollar-denominated assets into the precious metal.
The Proshare Market Intelligence report notes that while other nations are capitalizing on the global gold boom, Nigeria is missing out, trapped by illegal mining, weak regulation and limited diversification of reserves.
Despite sitting on vast deposits in Zamfara, Kebbi, Osun and Kaduna states, Nigeria’s gold holdings represent just 5.68 percent of its total reserves, far below what experts say is necessary for a balanced portfolio. The country also loses approximately 14.3 tons of gold annually due to illegal exports, costing it billions in lost foreign currency and denying the economy a natural protection against currency depreciation.
At a time when central banks are rushing to increase their gold holdings to hedge against a weakening dollar and geopolitical uncertainty, Nigeria’s slow progress in formalizing its gold sector leaves it lagging behind even smaller African economies.
According to the US Treasury Department’s July 2025 report, major economies, including China and Japan, which together hold more than $2 trillion in US Treasury securities, have begun to reduce their exposure to dollar assets. China reduced its holdings by $25.7 billion in July alone, while continuing to buy gold for 11 consecutive months.
This shift has been driven by the weaponization of the dollar, the risk of sanctions, and the need for value-neutral assets. Other big buyers in 2025 are Poland, Türkiye, the United Kingdom and India.
The result has been a historic rally that pushed gold above $4,000 an ounce in October 2025. Even after a brief sell-off on October 21 (the worst since 2013), gold is still up 58 percent so far this year, its strongest run since 1979.
Across Africa, countries are rapidly expanding production and building reserves. The continent produces 27 percent of the world’s gold and holds up to 40 percent of global reserves, but Nigeria remains largely absent from the success stories.
Ghana, Egypt and Mali have increased their investments in refining and export infrastructure. The Ghana Gold Board (Goldbod) reported $8 billion in small-scale gold exports between January and October 2025 (an increase of 264 percent from 2023), raising the country’s reserves to $11 billion and helping reduce inflation from 23.8 percent to 9.4 percent.
South Africa remains Africa’s biggest exporter, earning more than $8 billion this year, while Burkina Faso, Guinea and Mali have launched new gold mines or expansions to meet growing global demand.
By contrast, Nigeria’s gold potential remains largely untapped. At Afreximbank’s annual meetings in June, CBN Governor Olayemi Cardoso reaffirmed the apex bank’s plan to diversify reserves away from the dollar. Nigeria’s dollar holdings have fallen from 77.97 percent in 2021 to 71.69 percent in the first quarter of 2025, while gold holdings inched up from 2.85 to 5.68 percent, still modest compared to peer nations.
A 2024 SWISSAID report revealed that while industrial gold production was 3 tonnes in 2022, only 1.96 tonnes was officially declared by artisanal miners, with more than 14 tonnes being smuggled out annually. Between 2013 and 2022, undeclared exports reached 114 tonnes, highlighting deep-rooted governance and security failures.
Although the Presidential Artisanal Gold Mining Development Initiative (PAGMI) was launched in 2019 to formalize small-scale mining, results have been limited. Weak law enforcement, porous borders and a lack of refinery infrastructure continue to undermine Nigeria’s ability to benefit from its own resources.
Experts insist that Nigeria can reverse its losses by emulating Ghana’s formalization strategy. Key policy actions include:
Formalize artisanal mining cooperatives to ensure traceability and government revenue; Establish certified gold refineries to add value locally; Strengthen border security to curb smuggling; Utilize the Lagos Commodities and Futures Exchange (LCFE) to facilitate regulated domestic gold trading; Revoke inactive mining licenses and partner with private investors for capacity development; Increase gold reserves to 10 percent of total holdings to align with global benchmarks such as Switzerland and India.
Economists are also urging the Central Bank of Nigeria to channel excess liquidity from falling interest rates into purchasing locally produced gold, a move that could strengthen reserves, support the naira and protect against global uncertainty.
The global flight to gold reflects a profound shift in monetary strategy, as nations seek to safeguard their wealth in an unpredictable world. For Nigeria, the message is clear: formalize, refine and accumulate.
Until the country curbs illegal mining, strengthens regulation and invests in value-added, its gold wealth will remain underground while others convert theirs into reserves of power and prosperity.