African nations race to harness gold boom as Middle East conflicts fuels inflation risks

With gold prices near historic highs, African governments are increasingly treating the metal not just as a mining commodity but as a strategic economic asset. From Ghana’s push to build gold-backed reserves to the Democratic Republic of Congo’s efforts to formalise artisanal trade, countries across the continent are seeking to capture more value from the bullion boom while strengthening currencies and external buffers.

The shift comes as demand for safe-haven assets rises amid geopolitical tensions and expectations of looser monetary policy in advanced economies. For many African nations, the rally offers a rare chance to boost export earnings, rebuild foreign-exchange reserves and reduce macroeconomic vulnerabilities after years of currency volatility and high inflation.

Governments are responding by tightening oversight of mining sectors, investing in refining capacity and increasing state participation in gold trading. The aim is to move beyond exporting raw bullion and use gold to reinforce economic stability.

Gold’s strategic role has become even more important as escalating tensions in the Middle East push oil prices higher. The ongoing United States–Israel conflict with Iran has disrupted energy markets, driving Brent crude close to $100 per barrel and raising concerns about renewed inflation globally.

Higher oil prices pose particular risks for African economies, many of which rely heavily on imported refined fuel. Rising energy costs quickly filter into transport, food and electricity prices, threatening to reverse the disinflation gains recorded across several countries in the past year.

In this environment, the precious metal is increasingly viewed as a macroeconomic buffer. As a globally recognised store of value, it can help central banks strengthen reserves, stabilise currencies and cushion economies against external shocks.

Last year, the prices rose more than 60 percent to around $4,000 per ounce and have remained elevated trading around $5,190 – $5,193 per ounce as of March 11 amid geopolitical uncertainty and expectations of future interest-rate cuts by the US Federal Reserve.

The rally has created a windfall for Africa, home to some of the world’s largest gold reserves. Policymakers increasingly see the metal not just as an export commodity but as a tool for macroeconomic resilience.

In a recent report, the World Bank said gold prices could remain elevated, supported by safe-haven demand and continued central bank buying, though uncertainty remains high.

“A renewed escalation in geopolitical tensions or heightened policy uncertainty could push gold prices above current projections,” the bank said, warning that weaker industrial activity could weigh on silver and platinum.

Joseph Nnanna, chief economist at the Development Bank of Nigeria, told BusinessDay that African countries must build stronger value chains around gold rather than exporting raw resources.

“Gold, like any other natural resource, can only deliver sustainable value when it is processed along a full value chain,” he said. “Building strong value chains is essential for achieving sustainable economic growth.”

Ghana: Turning gold windfall into currency stability

Africa’s largest gold producer, Ghana, has emerged as one of the clearest examples of how the bullion rally can reshape macroeconomic fortunes.

Surging gold prices have boosted export revenues, strengthened foreign-exchange inflows and helped stabilise the cedi after years of severe depreciation. The currency’s recovery has in turn eased inflation pressures, marking a dramatic turnaround for an economy that faced a deep financial crisis just two years ago.

Inflation has fallen sharply from a peak of more than 54 percent in December 2022 to about 3.3 percent in February 2026 — the lowest level since 1999 — supported by a stronger currency, tighter monetary policy and improving food supply conditions.

The gold boom has also helped rebuild the West African nation’s external buffers. According to the country’s Ministry of Finance, gross international reserves have climbed to about $13.8 billion last year, equivalent to nearly six months of import cover.

Authorities are now seeking to institutionalise the gains. The government recently unveiled the Ghana Accelerated National Reserve Accumulation Policy (GANRAP), a framework designed to build reserves using gold-backed mechanisms rather than relying heavily on external borrowing.

At the same time, regulators are reviewing long-standing mining stability agreements and considering higher royalty rates as part of efforts to ensure the country captures a larger share of the value generated by record bullion prices.

For Ghana, gold is increasingly serving not only as an export commodity but as a key pillar of macroeconomic stabilisation.

Sudan: Gold lifeline amid conflict and sanctions

In Sudan, gold has become the backbone of an economy battered by years of sanctions, political instability and civil conflict.

The country produced about 70 metric tonnes of gold in 2025, exceeding official targets despite the ongoing war. Mining generated an estimated $1.8 billion in government revenue, making gold Sudan’s most important non-oil export and a crucial source of foreign exchange.

Yet much of Sudan’s gold wealth has historically been lost to smuggling and informal trade networks.

Officials estimate that while roughly 70 tonnes were produced last year, only about 20 tonnes were exported through official channels, highlighting the scale of illicit flows draining revenue from the state.

In an attempt to regain control of the sector, Sudan is now seeking new export routes and strategic partnerships.

Saudi Arabia announced plans in January to begin purchasing Sudanese gold directly, signalling a shift away from traditional export routes through Dubai that authorities say have been plagued by opaque pricing and widespread smuggling.

The partnership could help formalise exports, improve transparency and restore investor confidence in a sector that remains critical to Sudan’s economic survival.

Uganda: From coffee to gold economy

Uganda is rapidly emerging as one of Africa’s most dynamic gold trading hubs, underscoring how the global bullion rally is reshaping the region’s export landscape.

Gold exports surged 75.8 percent last year, generating $5.8 billion in revenue, according to the Bank of Uganda. The surge has pushed gold ahead of coffee to become the country’s largest export, marking a significant shift for an economy historically dependent on agricultural commodities.

Officials say the jump reflects both record global prices and a growing number of dealers entering the market.

“The attractive pricing environment has catalysed strong market participation,” said Adam Mugume, the central bank’s executive director for research and economic analysis.

The East African country has also positioned itself as a regional refining and trading hub, processing gold sourced from neighbouring countries such as eastern Democratic Republic of Congo and South Sudan.

Policy changes have helped accelerate the sector’s expansion. The government recently removed export levies on gold in a move aimed at formalising artisanal production and boosting the country’s competitiveness in the regional bullion trade.

At the same time, the inauguration of a $250 million Chinese-owned gold mine in eastern Uganda marks a step toward expanding domestic production alongside its growing role as a regional processing centre.

Burkina Faso: Resource nationalism reshapes mining sector

Burkina Faso has emerged as one of Africa’s fastest-growing gold producers, with output reaching a record 94 tonnes in 2025.

The government is pursuing a strategy of greater resource sovereignty, increasing state ownership in mining projects and expanding oversight of the sector.

Authorities now require up to 15 percent state equity in new mining ventures, part of a broader push to capture a larger share of revenues generated by the country’s mineral wealth.

The government is also planning to establish a national gold refinery, a move aimed at ensuring more of the value chain — from extraction to processing — remains within the domestic economy.

Mining revenues are already playing a growing role in public finances. The country’s Mining Development Fund collected about CFA85.7 billion ($152 million) last year, with resources channelled toward both national strategic projects and local development initiatives.

Officials say the surge in revenues reflects both stronger gold prices and increased contributions from semi-mechanised mining operations.

Burkina ’s approach reflects a broader trend across the continent, where governments are seeking greater control over natural resources and stronger participation in commodity value chains.

Democratic Republic of Congo: Formalising artisanal trade

The Democratic Republic of Congo is seeking to bring more of its vast artisanal gold sector into the formal economy. Last week, the Central African country opened its first gold refining facility, marking a significant step in the country’s effort to capture greater value from its vast mineral wealth.

The refinery is expected to process 500-600 kilograms of gold monthly, covering the full value chain from purchasing to bullion production.

State-owned DRC Gold Trading also established in partnership with the United Arab Emirates, aims to increase the amount of artisanal gold channelled through official markets.

Under the programme, the country’s central bank will have priority access to gold purchases, helping build national reserves while reducing smuggling.

The initiative reflects Kinshasa’s broader effort to strengthen transparency in a sector historically dominated by informal networks.

Senegal: Tightening control over gold trade

Senegal is also seeking to strengthen oversight of its gold sector amid concerns about large-scale smuggling.

Last year, the country’s President Bassirou Diomaye Faye ordered the creation of a National Gold Trading Centre aimed at improving transparency and ensuring the state captures more revenue from the precious metal.

A study by Swiss NGO SWISSAID estimates that between 36 and 41 tonnes of gold were illegally exported from Senegal between 2013 and 2022, costing the country billions in lost revenue.

Analysts say, by building reserves, formalising supply chains and investing in refining capacity, governments hope to transform gold from a simple export commodity into a strategic economic asset.

Whether the continent can move beyond extraction to capture more value from its mineral wealth will determine whether the current price surge becomes a temporary windfall or a foundation for long-term economic resilience.