Uganda’s central bank has started buying gold from local producers under a new programme aimed at diversifying its foreign exchange reserves and reducing exposure to traditional reserve assets.
The Bank of Uganda said it made its first purchase last Friday as part of a three-year pilot scheme designed to incorporate domestically mined gold into the country’s reserves.
Officials did not disclose the value or volume of the initial transaction but said the programme would involve ongoing purchases and processing of locally sourced bullion.
“The programme aims to build and diversify Uganda’s foreign exchange reserves portfolio by purchasing and processing domestically mined gold,” the central bank said in a statement.
Authorities say the move is intended to strengthen reserve adequacy while reducing risks associated with conventional reserve instruments such as foreign currencies and government bonds.
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The initiative places Uganda among a growing number of African countries exploring gold as a strategic reserve asset, amid increased global uncertainty and volatility in financial markets.
Central banks worldwide have stepped up gold purchases in recent years, driven by concerns over currency fluctuations, geopolitical risks and the need to diversify reserve holdings.
In Africa, countries including Kenya and the Democratic Republic of Congo have also announced plans to integrate gold into their reserve management strategies.
Uganda’s programme is notable for its focus on sourcing gold domestically, a move that could also support the local mining sector by providing a stable and formalised buyer.
The country has emerged in recent years as a major regional hub for gold refining and trade, with exports reaching about US$5.8 billion in 2025, representing a sharp increase from the previous year.
Much of this growth has been driven by refining and re-exporting gold sourced from across the region, although domestic production remains dominated by artisanal and small-scale miners.
By purchasing gold locally, the central bank may help formalise parts of the sector, improve traceability and encourage compliance with regulatory standards.
Analysts say the programme could also help reduce illicit trade by creating a transparent domestic market for gold transactions.
However, they caution that the success of the initiative will depend on effective oversight, pricing mechanisms and the ability to integrate artisanal miners into formal supply chains.
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The move comes as Uganda seeks to strengthen macroeconomic stability and build resilience against external shocks, including fluctuations in commodity prices and global financial conditions.
Diversifying reserves into gold can provide a hedge against inflation and currency depreciation, although it also introduces new challenges related to storage, valuation and liquidity.
Economists note that while gold is less liquid than traditional reserve assets, it is often viewed as a safe-haven asset during periods of economic uncertainty.
For Uganda, the programme represents both a financial strategy and a broader effort to leverage its growing role in the regional gold market.
If successfully implemented, it could enhance the country’s reserve management framework while supporting the development of its mining sector.
The central bank said it would monitor the programme closely over the three-year period before deciding whether to scale it up or make it a permanent feature of its reserve policy.
