By: News Ghana

Ghana stands out, dramatically boosting its reserves through a focused domestic program. Since launching its initiative in 2022, the Bank of Ghana has increased holdings by 255%, reaching over 31 tonnes by early 2025.

It now buys 20% of output from nine major miners at a slight discount to global prices.

This strategy delivers tangible benefits. Surging gold prices have significantly bolstered the Ghanaian cedi, making it one of the world’s top performers against the dollar recently, according to BMI analyst Orson Gard. The trend isn’t isolated. Tanzania pays miners locally for gold, Nigeria empowered its central bank to buy domestic production, and Namibia and Rwanda actively diversify reserves with the metal. Kenya and Uganda are exploring similar moves.

Some nations push further. Burkina Faso nationalized mines and aims to keep 5% of annual output in a National Gold Reserve. Zimbabwe even relaunched a gold-backed currency. The goal is clear: reduce reliance on the US dollar, stabilize currencies, and boost investor confidence. Gold offers a tangible anchor in turbulent times. But is this golden shield as solid as it seems?

Experts caution that significant risks accompany the rewards. Gard warns countries heavily reliant on gold exports, like Ghana, Tanzania, and Uganda, face a potential double blow if prices fall sharply. A downturn would simultaneously slash the value of their stored reserves and cripple vital export revenues, straining foreign exchange inflows. Selling large gold holdings quickly during a crisis to raise cash is also notoriously difficult, especially if prices are already dropping.

For now, the accumulation provides a valuable cushion against economic shocks and strengthens Africa’s position in global finance. Yet, as Gard emphasizes, the real challenge lies ahead: balancing the undeniable benefits of gold with the peril of becoming overexposed to its price swings. The very metal offering protection today could become a heavy burden tomorrow.