BoU projects $3bn in gold exports

Bank of Uganda (BoU) is set to finalise a domestic gold purchase programme aimed at bolstering the country's gold reserves and mitigating risks associated with international financial markets.

This initiative is expected to contribute significantly to the national economy, with projections indicating that Uganda could export more than $3.1 billion worth of gold by the end of the 2024/25 financial year.

The Deputy Governor of the central bank, Dr Michael Atingi-Ego, highlighted that the program is designed to support value addition to locally sourced gold.

"Our goal is to ensure that the gold purchased is strictly produced within Uganda, thereby promoting local industry, enhancing value retention, and supporting monetary policy," Dr Atingi-Ego stated.

The move comes as part of BOU's broader strategy to diversify its gold reserves, a decision that was sparked in October last year.

By strengthening its financial position through increased gold holdings, BOU aims to hedge against economic uncertainties and currency fluctuations.

This initiative is particularly timely given recent reports indicating a 12% percentdrop in Uganda’s foreign exchange reserves, partly attributed to external debt repayments.

By focusing on locally produced gold, the Bank of Uganda aims to reduce reliance on imported gold, which accounted for close to $2.1 billion in raw gold imports in the current financial year.

Dr Atingi-Ego emphasised that supporting local artisans in the gold industry will be crucial to narrowing the import gap and enhancing value addition processes.

"By exporting more than $3.1 billion in gold, we will not only support local artisans but also add significant value to our gold exports," he noted.

Reports from the Ministry of Energy indicate that Uganda’s exploration surveys have revealed gold ore deposits totaling approximately 31 million tonnes.

This could yield an estimated 320,158 tonnes of refined gold, with ongoing efforts to fast-track quantification and market studies supported by a budget of Shs41.55 billion for the financial year 2024/25.

The central bank’s Domestic Gold Purchase programme, combined with these mineral development initiatives, is poised to strengthen Uganda’s position in the global gold market and drive economic growth.