The Central Bank of Nigeria (CBN) reported a significant rise in its gold reserves in 2024. By the end of December 2024, the value of its gold holdings reached N2.77 trillion, up from N1.28 trillion at the close of 2023. This growth was primarily due to a sharp increase in global gold prices.
While the volume of gold held by the CBN remained the same at 687,402 troy ounces, the value of those reserves surged due to higher gold prices. As of December 2024, the price of gold was $2,624.39 per ounce, compared to $2,062.98 per ounce the year before.
The rise in Nigeria’s gold reserves reflects a global trend in which central banks have increased their gold purchases. This trend is driven by concerns about inflation, currency instability, and overall economic uncertainty.
Global Demand for Gold Drives Valuation
According to the World Gold Council, global demand for gold reached a record high in 2024. Central banks were major buyers, purchasing over 1,000 tonnes for the third year in a row. Gold’s average price for the year rose by 23% compared to 2023, hitting an average of $2,386 per ounce. In the last quarter of 2024, the price reached $2,663 per ounce, helping to further boost the value of central bank gold reserves.
The total value of global gold demand reached a staggering $382 billion in 2024, setting a new record and showing how much gold prices have increased across the world.
CBN’s Growing Gold Reserves and Strategy
In its 2024 financial report, the CBN also revealed that Nigeria’s external reserves had grown to N54.73 trillion by the end of the year, up from N29.98 trillion in 2023. Gold now makes up about 5.1% of Nigeria’s total reserves, a slight increase from 4.3% in 2023.
This growing reliance on gold shows the CBN’s strategy to diversify its reserves, moving away from relying too much on currencies like the dollar. This shift is seen as a way to protect Nigeria from currency risks and the volatility of global financial markets.
As central banks worldwide continue to buy gold, Nigeria’s decision to increase its gold reserves puts it in line with global trends. This move could help strengthen the country’s financial position against inflation and uncertain economic conditions.
