Tanzania is preparing to tap into its gold reserves to fund infrastructure development, marking a strategic shift toward internal financing as foreign donor support continues to decline across Africa.
President Samia Suluhu Hassan has authorised the Bank of Tanzania to proceed with a partial sale of the country’s gold holdings, according to Kitila Mkumbo, Minister of State in the President’s Office. While officials have not disclosed how much gold will be sold, the move signals a clear policy direction: Tanzania intends to rely more heavily on its own resources to meet growing fiscal and development needs.
Data released by the central bank last week shows that Tanzania’s gold reserves were valued at about 3.3 trillion Tanzanian shillings, roughly US$1.3 billion, as of the end of December. These reserves have grown steadily since 2023, when the government began purchasing gold from local miners as part of a broader effort to strengthen its balance sheet and reduce exposure to external shocks.
The decision comes at a time when global gold prices are near record highs, potentially allowing Tanzania to raise significant funds while limiting the volume of reserves it needs to liquidate. Analysts note that selling gold at elevated prices offers a rare window for governments to unlock capital without immediately resorting to higher borrowing or new taxes.
“We are reorganising ourselves,” Mkumbo said, reflecting a broader reassessment taking place across the continent as traditional aid flows become less reliable. Many African governments are adjusting to a new reality in which development partners in the United States and Europe are cutting back overseas assistance to focus on domestic priorities, including defence spending and economic stabilisation at home.
The funding squeeze has been particularly acute in recent years. The dismantling of the U.S. Agency for International Development under the Trump administration contributed to a sharp fall in global aid, with OECD estimates indicating a 17% drop last year alone. European support has also become more conditional and politically sensitive.
For Tanzania, relations with Europe have been strained following the country’s most recent elections. President Hassan’s victory was contested by opposition groups, and international media reported that protests were met with heavy security responses, with hundreds of deaths alleged. In response, the European Parliament passed a non-binding resolution in November calling for the suspension of a €156 million EU support programme for the country.
Against this backdrop, the planned gold sale is part of a wider pivot toward self-financing and resource-backed development. Infrastructure remains a central priority for the government, as it seeks to improve transport networks, energy supply, and public services to support long-term economic growth.
Economists caution, however, that while using gold reserves can provide short-term relief, it must be managed carefully to avoid weakening external buffers. Central bank reserves play a critical role in stabilising currencies and maintaining investor confidence, especially for emerging and frontier economies.
Still, Tanzania’s move reflects a growing trend across Africa, where governments are increasingly leveraging natural resources, whether gold, oil, gas, or minerals, to plug financing gaps and sustain development agendas in an era of shrinking aid and tighter global financial conditions.
Tanzania plans partial sale of gold reserves to fund infrastructure amid global aid cuts
