In a bid to strengthen its foreign reserves, Tanzania has called upon the country’s gold exporters to contribute to national efforts.
According to Reuters, Tanzania’s mining regulator has mandated all gold-exporting companies to allocate at least 20% of their gold to the Central Bank of Tanzania (BoT).
This initiative aims to support the bank’s strategy to diversify its foreign reserves.
The central bank began acquiring gold from local traders and miners in the previous fiscal year, which concluded in June, as a response to the depreciation of the local currency, the Tanzanian shilling. During that year, the BoT successfully purchased approximately 418 kg of gold and is now targeting an increase to 6 metric tons.
Starting October 1, a new mining regulation will require gold merchants to provide 20% of their gold to two approved refineries: Eye of Africa Ltd in Dodoma and Mwanza Precious Metals Refinery Ltd in Mwanza. The statement confirmed that “all payments will be made according to the Bank of Tanzania’s arrangements.”
Tanzania plays a significant role in the East African gold market, maintaining strong trade relations with neighboring countries.
The gold trade accounts for about 4% of Tanzania’s GDP and is a vital source of employment and foreign exchange revenue.
In July, Tanzania emerged as Uganda’s primary source of gold imports within the East African Community (EAC), contributing to Uganda’s gold trade worth over $3 billion. Uganda frequently purchases raw gold from Tanzania and resells the refined product.
According to the Ministry of Finance’s June Performance of the Economy report, Tanzania supplied 83% of all EAC products sourced by Uganda in the year leading up to May, amounting to Shs1.6 trillion out of Shs1.9 trillion in EAC imports.
