Central banks across sub-Saharan Africa are ramping up gold purchases in a bid to protect their economies from global financial instability and rising geopolitical tensions. Ghana is leading this shift, aggressively expanding its gold reserves through a unique domestic procurement programme.
Since launching the initiative in 2022, the Bank of Ghana has grown its gold holdings by a staggering 255%, reaching over 31 tonnes by early 2025. The central bank now buys 20% of production from nine major gold mining companies at a slightly discounted rate compared to global market prices.
The results are already visible. With global gold prices surging, the strategy has strengthened the Ghanaian cedi, which analysts say has recently ranked among the best-performing currencies against the US dollar. According to Orson Gard, an analyst at BMI, the programme has provided a rare currency stability boost in a challenging economic climate.
Ghana is not alone in this approach. Tanzania pays miners locally for gold, Nigeria has empowered its central bank to purchase domestic production, while Namibia and Rwanda are actively diversifying reserves with the metal. Kenya and Uganda are currently exploring similar policies.
Some countries are going even further. Burkina Faso has nationalised mines and now retains 5% of its annual gold output in a National Gold Reserve. Zimbabwe has relaunched a gold-backed currency in an effort to restore confidence in its monetary system. The underlying goal for all these moves is to reduce dependency on the US dollar, stabilise local currencies, and attract investor trust by holding tangible, globally valued assets.
However, this golden strategy comes with risks. Experts warn that for nations heavily dependent on gold exports — such as Ghana, Tanzania, and Uganda — a sharp drop in gold prices could cause severe economic damage. The blow would be twofold: reserves would lose value while export revenues would shrink, reducing critical foreign exchange inflows.
Gard notes another challenge: gold is not easy to liquidate quickly during a crisis, especially if prices are falling. This means that in a financial emergency, countries might struggle to convert their reserves into usable cash without incurring losses.
For now, the policy offers African economies a valuable cushion against economic shocks and strengthens their position in global financial negotiations. But as Gard cautions, the real test will be maintaining a balanced approach — reaping the benefits of gold without becoming dangerously dependent on it. The metal that is shielding these economies today could, under the wrong conditions, turn into a heavy burden tomorrow.
