Bank of Tanzania Expands Gold Reserves to Strengthen Economy

The Bank of Tanzania (BoT) is ramping up efforts to increase its gold reserves, aiming to reach six tonnes annually.

With over two tonnes already secured since October 2024, the central bank remains confident in achieving its target through strategic incentives and policy support.

A key element of the initiative is the introduction of a premium pricing model, which encourages miners—both large and small—to sell their gold directly to the BoT. By offering competitive market rates and guaranteeing quick payments, the bank provides an attractive alternative to private buyers. In addition, government reforms, including the removal of value-added tax (VAT) and reduced royalty fees on gold sales to the BoT, have further strengthened incentives for miners to participate.

The policy shift is part of Tanzania’s broader strategy to build a more resilient economy by diversifying foreign exchange reserves. President Samia Suluhu Hassan has emphasized the importance of gold as a national asset, with the BoT allocating 1 trillion Tanzanian shillings to its domestic gold purchase program. This move is expected to provide a steady market for local miners while safeguarding the country against global economic shocks.

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Authorities have also introduced measures to ensure a reliable supply of gold to the central bank. A directive from the Tanzania Mining Commission now requires gold exporters to reserve at least 20% of their production for sale to the BoT. This policy is designed to increase the country’s control over its mineral resources and reduce reliance on external markets.

Financial analysts suggest that once the reserves reach a stable level, the BoT could explore additional investment strategies, such as gold swaps and leasing, to further strengthen its financial position. These options would allow the central bank to generate revenue from its gold holdings while maintaining sufficient reserves for economic stability.

The expansion of gold reserves is seen as a long-term strategy to protect the national economy from currency fluctuations and inflation. By accumulating gold, Tanzania aims to create a financial cushion that can provide stability during periods of economic uncertainty.