According to the World Gold Council, gold is an important component of central bank reserves because of its safety, liquidity, and return characteristics – the three key investment objectives for central banks.
As such, Central banks are significant holders of gold, accounting for around a fifth of all the gold that has been mined throughout history. In recent years, African central banks have been taking steps to strengthen their gold reserves, positioning themselves favourably amidst global economic uncertainty.
In one of the latest such moves, the Bank of Uganda (BOU) has initiated a Domestic Gold Purchase Program with the aims of mitigating the declining foreign currency reserves and to buffer against ‘risks in the international financial markets.’
REPORT | Bank of Uganda to Buy Gold Locally to Boost Declining Foreign Reserves and Buffer Against ‘International Financial Markets Risks’
The gold purchase program, amongst other measures, is projected to reduce imports of raw gold, contributing to the reduction in total… pic.twitter.com/CYgytrWh22
— BitKE (@BitcoinKE) July 16, 2024
Uganda’s move is reminiscent of Zimbabwe’s initiatives to back its currency with gold, while South Africa, Nigeria, and Madagascar are either shoring up their gold holdings or considering doing so to protect their currencies and fight inflation.
INTRODUCING | Zimbabwe Introduces Zim Gold, the New Currency Backed by Gold and Precious Minerals – https://t.co/ncKtxrEzpg
— Jack Straw (@JackStr42679640) April 8, 2024
Which countries in Africa, however, have the largest gold reserves in Africa?
Below is a list of the top 10 countries that lead in terms of gold reserves as of 2024:
Algeria – Holding an impressive 174 metric tons of gold, Algeria stands strong as the leading African nation in gold reserves
South Africa – Following closely behind, South Africa maintains a substantial gold reserve of 125 metric tons
Libya – With a commendable gold holding of 117 metric tons, Libya secures the third spot on the list
Egypt – Holding 80.73 metric tons, Egypt consolidates its position as one of the key players in the African gold market
Morocco – Boasting 22.12 metric tons of gold, Morocco solidifies its status as a noteworthy contender in the African gold scene
Nigeria – With a respectable gold reserve of 21.37 metric tons, Nigeria demonstrates its growing interest in the precious metal
Mauritius – Holding 12.44 metric tons of gold, Mauritius makes its mark as a nation with a strategic focus on diversifying its reserves
Ghana – With 8.74 metric tons of gold, Ghana maintains a significant position in Africa’s gold landscape
Tunisia – Holding 6.84 metric tons, Tunisia showcases its presence as a country keen on harnessing the value of gold
Mozambique – Securing the tenth spot, Mozambique holds 3.94 metric tons of gold, contributing to the continent’s overall gold reserves
On the international level, the United States holds the world’s largest stockpile of gold reserves by a considerable margin. The country’s government has almost as many reserves as the next three largest gold-holding countries combined – Germany, Italy, and France. Russia rounds out the top five.
The International Monetary Fund (IMF) is one of the top gold reserve holders with 2,814.10 metric tons (3,102.01 standard tons) – almost as much as Germany.
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