The Central Bank of Uganda has officially begun buying gold from local producers in a move aimed at strengthening the country’s foreign exchange reserves and reducing reliance on traditional financial assets.
The initiative marks the rollout of a domestic gold purchase programme that was first announced about two years ago. The central bank confirmed that its first transaction under the scheme was completed last week, although it did not disclose the value of the purchase.
The programme will run as a three year pilot and is designed to integrate locally mined gold into Uganda’s reserve portfolio. By doing so, the central bank hopes to diversify its holdings and improve financial stability at a time of growing uncertainty in global markets.
Officials say the strategy is intended to reduce risks associated with conventional reserve instruments such as foreign currencies, while also boosting reserve adequacy. Gold is widely regarded as a safe asset, particularly during periods of economic volatility, making it an increasingly attractive option for central banks across emerging markets.
Under the framework, the Bank of Uganda will purchase gold from licensed and prequalified miners, with payments made in local currency based on prevailing international prices. The gold will then be processed and refined to meet international standards before being added to the country’s official reserves.
The initiative is also expected to support Uganda’s domestic mining sector by creating a steady market for producers and encouraging formalisation within the industry. Authorities believe the programme could strengthen value chains, improve traceability and enhance compliance with international regulations governing mineral sourcing.
Uganda’s move reflects a broader trend among African central banks, including those in Kenya and the Democratic Republic of Congo, which are increasingly turning to gold as a way to diversify reserves and hedge against global financial risks.
The policy comes amid a surge in Uganda’s gold sector, with the country emerging as a major regional hub for gold processing and trade. In recent years, export revenues from gold have grown sharply, underlining the metal’s importance to the national economy.
Analysts say the success of the programme will depend on effective implementation, including transparency in procurement, strong regulatory oversight and the ability to integrate gold seamlessly into the central bank’s reserve management framework.
If executed properly, the initiative could provide Uganda with a more resilient financial buffer while also supporting domestic economic activity, positioning the country to better navigate future global shocks.
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Emmanuel Abara Benson is a business journalist and editor covering artificial intelligence, global markets, and emerging technology.
He has previously worked with Business Insider Africa and Nairametrics, reporting on finance, startups, and innovation.
His work focuses on AI, digital economy, and global tech trends.
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