Central banks across sub-Saharan Africa, including Ghana, are ramping up gold purchases to protect their economies from global uncertainty, especially the financial instability in the United States and rising geopolitical tensions worldwide.
For Ghana, this strategy is about more than simply storing shiny bars in vaults. Since launching its Domestic Gold Purchasing Programme in 2022, the Bank of Ghana has boosted its gold holdings by a staggering 255%, from 8.7 tonnes to over 31 tonnes as of the first quarter of 2025. The country has even struck deals with nine mining companies to buy 20% of their output at a 1% discount to the London Bullion Market Association (LBMA) price.
Ghana’s burgeoning gold reserves are also having a strong positive impact on the local currency. Senior analyst at BMI’s Sub-Saharan Africa Country Risk team, Orson Gard told China Daily that the surge in gold prices had made the Ghanaian cedi one of the world’s best-performing currencies against the US dollar.
Other African nations are moving in the same direction. Tanzania now pays local miners in local currency for their gold. Nigeria passed a law empowering its central bank to buy more domestically produced gold. Namibia and Rwanda are diversifying reserves through gold, while Kenya and Uganda are considering similar steps.
Some countries are taking it even further. Burkina Faso has nationalized gold mines and aims to keep at least 5% of its annual gold production in a National Gold Reserve. Zimbabwe has relaunched a gold-backed currency, the Zimbabwe Gold, to try and steady its economy.
The idea is simple: gold can act as a financial shield. By holding more of it, countries can reduce dependence on the US dollar, protect their currencies from sharp swings, and strengthen investor confidence. And it’s working at least for now.
The Catch: Big Rewards, Big Risks
While gold is seen as a safe bet, it’s not without risk. Gard warns that if global gold prices drop sharply, countries like Ghana, Tanzania, and Uganda, which not only stockpile gold but also rely heavily on it for export earnings, could face a double blow.
A drop in prices would shrink the value of their reserves and slash export revenues, reducing the flow of foreign currency into their economies. There’s also a practical problem: gold isn’t as liquid as cash. Selling it quickly for foreign exchange during a crisis can be complicated, especially if prices are falling.
A Balancing Act
For now, the strategy seems to be paying off, giving countries like Ghana a cushion against economic shocks and a stronger bargaining position in global markets. But as Gard points out, the challenge will be balancing the benefits of gold accumulation with the risks of overexposure, because the same metal that protects a currency today could weigh it down tomorrow.
