Tanzania plans to sell part of its gold reserves to finance infrastructure investment, its planning and investment minister said, as concessional financing and budget support become less certain for African countries amid a global pullback in development aid.
Planning and Investment Minister Kitila Mkumbo said on Monday that President Samia Suluhu Hassan had instructed the central bank to carry out a partial sale of the country’s bullion holdings, taking advantage of record-high gold prices.
“Governments are no longer interested in providing aid to Africa, so we are reorganising ourselves,” Mkumbo said during remarks in London.
The Bank of Tanzania has been tasked with implementing the sale, Bloomberg reported. Authorities have not disclosed how much gold will be sold, when the transaction will take place, or how proceeds will be allocated among infrastructure projects.
According to central bank data published last week, Tanzania’s gold reserves were valued at about $1.3 billion at the end of December 2025.
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Aid environment deteriorates
The decision comes as official development assistance declines globally, with several donor countries scaling back overseas aid and reallocating spending toward domestic priorities, particularly defence and security.
In the United States, an initiative launched under President Donald Trump led to the closure of the U.S. Agency for International Development (USAID), which for more than six decades had been a central pillar of Washington’s bilateral development cooperation.
In Britain, the government announced in early 2025 that it would gradually reduce its aid budget from 0.5% to 0.3% of gross national income by 2027, citing the need to finance higher defence and security spending.
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Similar reductions or reallocations have been reported in France, Sweden, the Netherlands and Germany, according to media reports, further tightening the pool of concessional financing available to developing countries.
For Tanzania, the shift comes at a sensitive time. The country has faced criticism from the European Union following the disputed presidential election of October 2025, which returned Samia Suluhu Hassan to power.
In November 2025, the European Parliament adopted a non-binding resolution calling for the suspension of a 156 million euro ($170 million) aid programme for Tanzania. The European Commission has said it continues to engage with Tanzanian authorities but has not announced a final decision on the funding.
Infrastructure funding pressure
Tanzania has made large-scale infrastructure investment a central pillar of its development strategy, with projects spanning transport, energy and logistics aimed at supporting economic growth and regional trade.
However, rising global interest rates, weaker aid flows and pressure on public finances have made financing such projects increasingly challenging, prompting authorities to explore alternative funding sources.
The planned gold sale underscores a broader trend among resource-rich countries seeking to monetise assets or strengthen domestic financing mechanisms as access to concessional funding tightens.
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Gold’s role in the economy
Gold is a cornerstone of Tanzania’s mining sector and a key source of foreign exchange. The country is among Africa’s leading gold producers, with output estimated at about 52 tonnes in 2023, according to the World Gold Council.
Central bank data show that gold accounted for around 22.5% of Tanzania’s total exports in 2023, with an export value of approximately $3.05 billion.
The mining sector contributed nearly 9.9% of gross domestic product and about 15% of tax revenues, underscoring its importance to public finances and economic stability.
In recent years, authorities have tightened oversight of the gold sector and sought to capture more value domestically.
In September 2023, Tanzania launched a programme under which the central bank began purchasing gold directly from local miners to boost foreign exchange reserves. In 2024, the government introduced a requirement for mining companies and gold traders to sell 20 percent of their export proceeds to the Bank of Tanzania.
Officials say these measures are intended to stabilise reserves, improve transparency and reduce capital flight, while ensuring that the country benefits more directly from high global gold prices.
While the scale and timing of the planned reserve sale remain unclear, the move signals Tanzania’s willingness to use its mineral wealth to cushion the impact of a more restrictive global financing environment and sustain investment in priority infrastructure projects.
