A pivotal shift in monetary strategy
Uganda’s central bank has officially launched its long-anticipated domestic gold purchasing programme, marking a defining moment in the country’s monetary policy and reserve diversification strategy. The Bank of Uganda confirmed on Tuesday that its first gold purchases were made last Friday under a three-year pilot programme designed to gradually integrate domestically mined gold into the nation’s foreign exchange reserves.
The programme, first announced in early 2026, aims to purchase at least 100 kilograms of gold between March and June this year, with the ultimate goal of building a more resilient and diversified reserve portfolio. According to the Bank of Uganda, the initiative will “strengthen reserve adequacy and reduce risks associated with conventional reserve instruments” — a signal that the central bank is seeking to hedge against currency volatility and exposure to US dollar-denominated assets.
Uganda has emerged as one of East Africa’s most significant gold producers and exporters in recent years. In 2025, the country exported gold worth $5.8 billion — a staggering 76% increase from the $3.3 billion exported in 2024, according to figures from the Bank of Uganda’s executive director, Adam Mugume. That growth trajectory has placed Uganda among the continent’s most dynamic gold markets, even as regulatory frameworks governing small-scale and wildcat mining operations remain loose.
Why gold now?
Central banks across Africa have been steadily increasing their gold holdings in recent years, driven by concerns about inflation, currency devaluation, and the geopolitical risks associated with holding large quantities of US Treasury securities. Countries like Kenya, the Democratic Republic of Congo, and Rwanda have all signalled moves toward incorporating gold into their reserve strategies.
Globally, gold prices have surged to historic highs, underpinned by ongoing geopolitical tensions, rising sovereign debt levels, and growing demand from central banks in emerging market economies. For Uganda, the timing of the programme aligns with a period of exceptional price momentum that makes accumulation commercially attractive.
However, analysts have flagged challenges. Uganda’s gold sector remains dominated by small-scale wildcat miners whose operations are difficult to regulate and whose output quality can vary significantly. The central bank will need to work closely with domestic refineries to ensure that all gold purchased meets the required standards for inclusion in official reserves.
Implications for the mining sector
The launch of the purchasing programme is expected to have ripple effects across Uganda’s mining sector. By creating a direct and reliable institutional buyer for domestically produced gold, the programme could incentivise formalisation among small-scale miners who have historically operated outside the formal financial system.
Miners and industry groups have welcomed the development, though some have raised concerns about pricing transparency and the potential for the central bank to exert downward pressure on market prices during periods of high supply. Civil society organisations have also called for safeguards to ensure that artisanal mining communities — many of whom rely on gold for their livelihoods — are not disadvantaged by the new framework.
As Uganda navigates this new chapter in its gold strategy, the success or failure of the programme will be closely watched by other African nations weighing similar moves. The continent’s central bank gold rush is far from over, and Uganda’s experience could provide a template — or a cautionary tale — for others following suit.