Tanzania miners ordered to sell 20% of their gold to the central bank

DODOMA, Tanzania

Tanzania has introduced a new directive requiring gold mining companies and traders to sell at least 20% of their gold to the Bank of Tanzania (BoT) as part of a strategy to strengthen the country’s foreign exchange reserves.

This regulation aims to stabilise the Tanzanian shilling, which has depreciated by nearly 8% against the US dollar this year.

The central bank has set an ambitious target of acquiring six metric tons of gold in the current financial year, a significant increase from the 418 kg it purchased in the 12 months leading up to June 2024.

Gold transactions are directed to two major refineries: Eye of Africa Ltd in Dodoma and Mwanza Precious Metals Refinery Ltd in Mwanza. Tanzania’s foreign exchange reserves currently stand at $5.29 billion, which is sufficient to cover 4.3 months of imports.

As one of Africa’s top gold producers, Tanzania continues to rely on major industry players like AngloGold Ashanti Plc and Barrick Gold Corp to maintain its position in the global gold market.

The Tanzanian stock market demonstrated impressive growth from January to September 2024, with total market capitalisation increasing by 22% from $5.86 billion to $7.13 billion.

Domestic market capitalisation also saw a 7% rise, reaching $4.89 billion by the end of September.

The government bond market showed robust activity, with the value of outstanding bonds climbing by 18.5% to $9.62 billion. However, the market for sustainable bonds remained unchanged at $184.03 million, suggesting potential room for future development.