Uganda Begins Buying Local Gold to Boost Foreign Reserves
The Bank of Uganda has started purchasing gold from domestic producers under a programme first announced two years ago, aimed at strengthening the country’s foreign exchange reserves and diversifying its reserve assets.
The central bank said the initiative will allow gold to form part of Uganda’s official reserve holdings, alongside traditional foreign currencies, as part of efforts to improve financial stability and reduce exposure to external shocks.
Officials explained that the programme is designed to formalise gold trading from artisanal and small-scale miners, while also increasing transparency and government participation in the sector.
The move comes as several African countries explore alternative reserve strategies, including commodity-backed reserves, in response to global currency volatility and pressure on foreign exchange markets.
Analysts say incorporating gold into reserves could help Uganda strengthen its balance of payments position, though challenges remain around sourcing, pricing, and regulatory enforcement in the informal mining sector.
