Will African governments facilitate this or permit it to be successful for long, insofar as demand for gold is sure to reduce demand for…
by Chris Powell of the Gold Anti-Trust Action Committee (GATA)
Dear Friend of GATA and Gold:
You may recall that your secretary/treasurer long has lamented “the rich countries insisting on being poor,” the still-developing countries with large gold resources and even large gold production that nevertheless have declined to incorporate the metal into their monetary systems but instead have remained the slaves of the developed world and its more sophisticated — and exploitive — monetary systems.
Almost miraculously, some Nigerians have just set out to do something about it comprehensively.– to build what they call a “gold value chain” in the gold treasure house of west Africa — really, a gold economy in which metal mined locally is turned into not just jewelry locally but also local savings of wealth through a digitized system of gold ownership in which metal credits can be converted to gold coins and bars at local banks.
The enterprise, called Sanu, a west African word for gold, has been started by Kian Smith Trade & Co. Ltd. in Lagos, which operates a gold refinery and other businesses. Sanu has created an internet application that allows the purchase of small amounts of gold and silver that can be redeemed for metal in LBMA-certified products at bank branches not only in Nigeria but also London and Dubai. All metal purchases via Sanu are made on a fully allocated basis — no fractional-reserve gold banking here, as in London and New York.
Sabu’s objective is to help the people of west Africa invest and save in their region’s own natural wealth and protect themselves with a local form of money against the notorious inflation of developing-country currencies.
Will African governments facilitate this or permit it to be successful for long, insofar as demand for gold is sure to reduce demand for African government currencies? That is a critical question, but African governments recently have shown some recognition of gold’s enduring monetary properties and the strength gold can bring to their currencies. Ghana lately has been acquiring domestically produced gold for its central bank reserves, and Zimbabwe has just begun experimenting with gold coinage redeemable at its central bank.
A crucial insight about Sanu’s objective was offered this week in an interview with the Lagos newspaper This Day by the executive vice chairman of the Kian Smith refinery, Nere Emiko:
We really believe that we have the product that gives gold to the people. Everywhere we’ve gone in the last few years people keep asking: ‘This gold you say you are refining, that you’re selling — where is it?’ The same thing is actually happening for Burkina Faso, which is No. 2 in west Africa after Ghana for gold production. Believe it or not, but most people in Burkina Faso have never seen gold. Yet Burkina Faso has several airstrips dedicated to daily evacuation of gold.
So a lot of what you find happening in our region is there are wealth and mineral resources that we are producing but can’t access, and this is a way of now giving Nigerians, west Africans, and anyone in Africa the opportunity to access gold.
Apart from jewelry, it is almost impossible to access gold refined to international standards in our local currencies. We have done all the work now to give the people access to gold in the small retail quantities they want, empowering women and giving gold to the people.
What happens when the people of gold-producing developing countries start seeing the metal they mine functioning as savings and money in their daily lives, an alternative not only to their local currencies but also to their current inflation hedge, the U.S. dollar?
They may become independent and sovereign in a very practical sense — a danger to the imperial powers of the West. But then those imperial powers, already tied up with the war in Ukraine, can’t invade everybody.
Sanu’s internet site explains its operation:
Recent Nigerian television news interviews about it can be viewed at YouTube here and here.
Something similar should be attempted in Central and South America, other gold-producing regions full of rich countries insisting on being poor.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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