TANZANIA will buy gold at market prices in terms of a directive given to miners of the metal within its borders that they sell 20% of the metal they hold.
The central bank will also offer reduced fees and faster payment processing as part of the gold purchase program, said Bloomberg News citing a public notice on October 1.
The central bank started buying gold from miners in 2023 as a diversification strategy to help support Tanzania’s shilling, which has depreciated almost 8% against the dollar this year. AngloGold Ashanti and Barrick Gold operate mines in the country.
Uganda, Madagascar and Ghana also have programs to buy gold from miners to hedge against geopolitical tensions that have battered their currencies, said Bloomberg News.
Gold has set about 30 all-time price highs this year, according to John Reade, senior market strategist at the World Gold Council who added that the metal was currently “at the heart of the geopolitical landscape”.
“Gold is attractive to Chinese investors as well as Chinese money that’s gone offshore,” he said recently at the FT Mining Summit. He also said the gold price was driven by central bank purchases by emerging markets as they ‘de-dollarised’ their economies.
In the latest effort to devise a credible national currency, Zimbabwe in April replaced its dollar with the ZiG, short for Zimbabwe Gold. The ZiG is backed by gold, precious minerals and cash reserves. “Our currency is anchored on gold,” the country’s mines minister Winston Chitando said at the time. “Hence the need to ensure that all the gold trade is done through Fidelity Gold Refinery.”
