In a strategic move aimed at supporting the expansion of the mining industry and fortifying foreign exchange reserves, the Bank of Tanzania (BoT) has initiated a substantial gold-buying program. Governor of the Bank of Tanzania, Mr. Emmanuel Tutuba, announced this development during his visit to the Geita Gold Refinery and the Mwanza Precious Metals Refinery Co. Ltd.
Under this initiative, BoT has already acquired and refined 418 kilograms of gold. Mr. Tutuba revealed, "As highlighted in the budget by the Minister for Finance, Dr. Mwigulu Nchemba, the government has allocated funds for the purchase of gold. This year, our target is to procure six tonnes of gold, sourced from small-scale, middle-scale, and large-scale miners."
The primary goal of BoT's gold purchases is to diversify Tanzania's foreign exchange reserves, reducing reliance on a single currency. This diversification strategy is designed to safeguard Tanzania's wealth against currency devaluation and economic instability caused by global shocks.
Mr. Tutuba emphasized the significance of this move, stating, "Now, for the first time, we have both a gold and dollar reserve. Previously, since Tanzania gained independence, we only had the US dollar as a foreign exchange reserve, but from this month on, that is no longer the case."
In broader efforts to oversee mineral exports and boost the mining sector's contribution to the country's GDP, the government has recently increased its engagement in the mining sector. This includes strengthening regulations, establishing a national gold reserve, and setting up mineral shops in over 22 regions nationwide.
Governor Tutuba also outlined BoT's commitment to boosting exports and enhancing the quality of domestically manufactured goods for international markets through the Export Credit Guarantee Scheme. He emphasized their active discussions to explore ways to assist small-scale miners in securing funds, engaging in mining operations, and selling their gold to refining facilities, ultimately contributing to the Central Bank's gold reserves.
He also urged major gold traders to adhere to foreign exchange regulations requiring the repatriation of foreign exchange earnings from gold sales back into the country within 90 days, emphasizing its importance in supporting the nation's economic growth.
Tanzania is home to several large-scale gold miners, including Geita Gold, Bulyanhulu, North Mara, and Buzwagi, alongside numerous artisanal and small-scale miners across the country.
The establishment of the National Gold Reserve, announced during the 2023–24 budget presentation, is part of Tanzania's commitment to regulating the mining sector and ensuring greater benefits from its abundant natural resources. This move follows concerns about fraud, smuggling, and underreporting of production and profits in the mining sector.
Additionally, the Central Bank of Tanzania's active participation in the Sixth Mining Technology Exhibition, scheduled from September 20 to September 30, 2023, at Bombambili grounds in Geita, offers an excellent opportunity to strengthen collaboration between the Central Bank and the country's mining sector.