The Bank of Tanzania's gold purchasing section has announced a significant milestone, with gold acquisitions rising from six tonnes to 35 tonnes over two years. This achievement is promising, but a thorough analysis is necessary to ensure that further gold acquisitions strengthen reserves without causing excessive concentration, liquidity issues, market risks, or inflation. The program, launched in October 2024, aims to convert part of Tanzania's large gold output into a strategic reserve, diversify foreign-exchange holdings, and enhance overall financial and monetary stability.
The program has seen remarkable growth, with the 2024/25 Annual Report stating that by June 2025, 6,190.4 kilogrammes (roughly 6.19 tonnes) of gold had been purchased. The bank indicated that this gold was intended for refining to London bullion standards and for addition to monetary reserves. If this gold had been refined locally to international bullion standards, it could have yielded greater economic benefits for Tanzania. The program has rapidly transitioned from an experimental phase to a significant reserve-management operation.
In the 2025/26 financial year, the program rose sharply, with the Bank of Tanzania buying 21,710 kilogrammes, or 21.71 tonnes, via domestic refineries. This results in approximately 6.19 tonnes for 2024/25 and 21.71 tonnes for 2025/26, with a cumulative total of about 27.90 tonnes. This reflects the governor's later statement that over 28 tonnes had been gathered in 18 months. The program's growth has been significant, with the Bank of Tanzania's Monetary Policy Statement indicating that by December 2025, monetary gold made up roughly 13 per cent of foreign exchange reserves.
The Bank of Tanzania Governor announced that by July 2026, the bank had gathered around 28 tonnes of gold over 18 months, worth roughly 3.68 billion US dollars (about 9.76tri/-) at the then-current gold prices. The governor's statement highlights the program's success, but also raises questions about whether the program delivers maximum economic benefit competitively and whether the country manages the risks of accumulating such a large share of its reserves in one commodity.
Typically, foreign-exchange reserves mainly consist of currencies and foreign securities. Gold also serves as a reserve asset, as its value isn't directly linked to the creditworthiness or monetary policy of any single foreign government. The diversification of reserves is a significant economic milestone, as it enhances overall financial and monetary stability. The program's impact on Tanzania's economy will be closely watched in the coming months.
Minister for Minerals Antony Mavunde reposted the achievement, highlighting the program's success. However, a detailed look at the Bank of Tanzania's figures shows that there is still room for improvement. The program's results are significant, but the country must ensure that it manages the risks associated with accumulating a large share of its reserves in one commodity.
The program's success has attracted notice as a major reserve-management strategy in recent years. With total reserves around US$6.33 billion, enough to cover approximately 4.9 months of expected imports, Tanzania's gold acquisition program has made significant strides. As the program continues to grow, the country must balance the benefits of gold acquisition with the potential risks and ensure that the program delivers maximum economic benefit competitively.
Key points
- The Bank of Tanzania has accumulated around 35 tonnes of gold over 18 months.
- The program aims to convert part of Tanzania's large gold output into a strategic reserve, diversify foreign-exchange holdings, and enhance overall financial and monetary stability.
- Gold's value isn't directly linked to the creditworthiness or monetary policy of any single foreign government, making it a valuable reserve asset.
