Financial analysts are calling on the Central Bank of Nigeria (CBN) to increase its gold reserves and diversify its foreign asset holdings, including considering crypto-based instruments, as global uncertainty continues to reshape central bank strategies.
The push for diversification gained renewed attention at the recent Comercio Partners H2 Economic Outlook event, where leading economists and treasury executives highlighted the benefits of non-traditional assets amid inflationary pressure and geopolitical volatility.
According to official data, the CBN held 687,402 troy ounces of gold at the end of 2024, unchanged from the previous year.
However, the value of this reserve nearly doubled to N2.77 trillion, up from N1.28 trillion in 2023, fueled by a jump in gold’s market price from $2,062.98 to $2,624.39 per ounce.
This gain of over N1 trillion reflects not only the asset’s resilience but also a broader international trend of central banks increasing gold purchases in response to economic instability.
Gold as a Catalyst for Growth and Resilience
Speaking at the event, Professor Joseph Nnanna, Chief Economist at the Development Bank of Nigeria, said expanding domestic gold reserves could support industrialization and job creation.
“Buying more gold isn’t just about hedging risk, it drives industrial growth,” Prof Nnanna said. “When central banks purchase locally produced gold, it activates the entire value chain, from mining to refining to manufacturing.”
He argued that gold offers a multiplier effect by encouraging investment in domestic supply chains and building capacity for value-added industries like jewelry and electronics.
Prof Nnanna also called for broader diversification beyond the bank’s current mix of gold and U.S. dollars, adding that exposure to crypto assets, stablecoins, and alternative currencies could help protect reserves against future shocks.
“Holding only fiat currencies like the dollar, which has lost value recently, is risky. Gold continues to appreciate, and adding emerging asset classes can improve resilience,” he explained.
Geopolitics Driving De-Dollarisation Advocacy
Zeal Akaraiwe, CEO of Graeme Blaque Advisory, emphasized the strategic need to reduce dependence on U.S. dollar holdings, citing geopolitical risks.
“Our ability to trade or settle transactions hinges on political choices made in America, not just economic logic,” Akaraiwe warned. “Once political decisions affect settlement systems, countries begin to look for alternatives.”
He praised China’s dual currency model as a blueprint for safeguarding financial sovereignty. China’s CNY (domestic yuan) and CNH (offshore yuan) system, he said, has allowed it to engage in global finance while protecting its internal economy.
“China anticipated these vulnerabilities years ago and took steps to shield its financial system. Other countries, including Nigeria, must now follow suit.”
What You Should Know
- Both experts agreed that asset diversification is now a strategic necessity, not just a theoretical financial choice.
- With increasing global volatility and the emergence of digital and decentralized assets, the CBN is being urged to adapt its reserve management strategy to reflect modern economic realities.
Well it’s nice to hear positive news but just holding it wouldn’t boost the economy