KAMPALA, Uganda — The Bank of Uganda (BoU) has begun purchasing gold from local miners under a new three-year initiative aimed at strengthening foreign exchange reserves and formalising the country’s fast-growing gold sector.
The central bank confirmed it executed its first transaction on April 17 under the Domestic Gold Purchase Programme.
“The programme aims to build and diversify Uganda’s foreign exchange reserves portfolio,” the Bank said, adding it would “strengthen reserve adequacy and reduce risks associated with conventional reserve instruments.”
Under the scheme, the Bank will purchase gold from licensed miners in Ugandan shillings at prevailing international prices, refine it to global standards, and incorporate it into national reserves.
Officials say the programme is designed to provide a stable domestic market for artisanal and small-scale miners, reduce gold smuggling, and retain more value within Uganda’s economy.
“This programme is expected to contribute to the formalisation of Uganda’s gold sector by promoting local value addition and strengthening economic linkages,” the Bank said.
The initiative is being implemented in collaboration with the Ministry of Energy and Mineral Development, which has developed a traceability framework to monitor gold flows from extraction to sale.
“This framework is critical in ensuring a transparent and accountable supply chain, mitigating risks of illicit trade,” officials said.
Uganda’s gold sector has long faced scrutiny over informal trade and cross-border smuggling, with analysts estimating that a significant portion of output has historically bypassed official channels.
The move aligns with a broader global shift as central banks increasingly turn to gold as a hedge against geopolitical and financial uncertainty.
Data from the World Gold Council shows that central banks purchased over 1,000 tonnes of gold in 2024, the highest level in decades, amid currency volatility, inflation concerns, and geopolitical tensions, including those linked to the Middle East.
Uganda’s strategy mirrors similar policies in countries such as Ghana and Mongolia, where domestic gold purchases have been used to strengthen reserves while curbing illicit trade.
Domestically, the programme builds on Uganda’s rapidly expanding gold trade, which has emerged as the country’s leading export earner.
Official figures indicate that Uganda exported gold worth approximately $5.8 billion in 2025, surpassing traditional exports such as coffee, largely driven by elevated global prices and increased regional trade flows.
At the same time, Uganda’s foreign exchange reserves have strengthened, reaching an estimated $6 billion by late 2025, supported by export growth and capital inflows.
Also Read: Security guard arrested over theft of Shs29m, 900 grams of gold in Kampala
Analysts say increasing gold holdings could provide a buffer against external shocks, particularly as Uganda remains vulnerable to global fuel price fluctuations and exchange rate pressures.
Gold, unlike fiat currencies, is often viewed as a stable store of value during periods of economic uncertainty.
To ensure compliance, the central bank confirmed it has obtained a Mineral Dealer’s Licence and registered with the Financial Intelligence Authority, aligning the programme with anti-money laundering regulations.
“The programme will allow the Bank to test operations, strengthen controls and apply lessons before scaling up,” it said.
If successfully implemented, the initiative could enhance government revenues, stabilise incomes for miners, and position Uganda to capture greater value from its gold sector amid rising global demand.
