In a move that has been termed a “strategic measure to protect its wealth and strengthen financial resilience” the Nigerian government is planning to repatriate its gold reserves back to the country from the US.
It is believed that Nigeria has 21 tons of gold in its reserves which is stored in US vaults. Apparently, by repatriating its gold , Nigeria is signaling to establish greater control over its financial assets.
This move to domicile its gold at home is coming as worries about the health of the US economy, which is now characterized by “doomers” such as mounting inflation, escalating debt, and geopolitical tensions, is growing amongst the club of central banks of countries. Thus, the desire of the Central Bank of Nigeria (CBN) to take control of its gold reserves domiciled in US vaults, is intentioned to reduce the risks which the weakening US economy, and the overall the stability of the US financial system portends. Basically, it is a proactive move by the CBN to safeguard the country’s wealth. By taking the decision to repatriate its gold reserves, the CBN aims to minimize the exposure of the country’s economy to external vulnerabilities. The move is also aimed to give the Nigerian government greater control over its financial assets amidst a climate of rising global geo-political and geo-economic uncertainties and tensions..
However, Nigeria is not alone in wanting to take control of its gold reserves and to domicile them at home. Recently, India also repatriated 100 tonnes of its gold from UK where it was stored .
In recent times, many countries are becoming increasingly concerned over the manner in which the US and its Western allies are weaponizing their controls over the instruments of the global financial system. This is demonstrated in their unabashed use of the gold and foreign exchange reserves of countries stored in their depositories as coercive weapons of foreign policy manipulations.
In 2009, with the aim of derailing the peaceful nuclear power development ambitions of Iran, the British government froze $1.64 billion of the country’s reserves, including gold, stored in its vaults. And in 2020, the Bank of England brazenly and unlawfully froze, and later confiscated, 31 tonnes of Venezuelan gold, valued at nearly $1bn, stored in its vault; on the basis of the West’s disagreements with the result of democratic elections conducted in Venezuela.
The worries and fears of many governments, and their central banks, about falling victims to the arbitrary, and out of control, sanctions of the US and other Western countries is now at fever pitch levels. This follows the freezing, and threatened seizure, of nearly $350 billion of Russia’s gold and foreign exchange reserves kept in western depositories; on account of the Russian Special Military Operation (SMO) against Ukraine.
These fears, by the Nigerian and other governments, which are also accelerating the reduced use of the US dollars in inter-country trade, are reasonably justified, as the US and its Western allies are intensifying their threats, and are mounting heavier pressures on countries around the world, especially in Africa and the global south, to support their stand against Russia.
Pertaining to the growing momentum of the repatriation of off-shore gold, a survey conducted by the World Gold Council (WGC) showed that 68% of central banks of countries around the world are moving to keep their gold reserves within their own borders.