Inside Tanzania’s gold reserves: BoT governor opens up on sale

This decision was informed by global trends, where gold-producing countries have increasingly leveraged their gold resources by refining them to international standards, making them acceptable as monetary gold. Tanzania has adopted the same approach.

Initially, the plan was to build gold reserves of 20 tonnes over three years. However, this target was nearly achieved (19.6 tonnes) 18 months ahead of schedule. Reaching this milestone earlier than expected made it prudent to sell part of the gold for specific policy purposes.

One of the key objectives was to support the domestic foreign exchange market. For instance, two weeks ago, arrangements were approved to inject additional US dollar liquidity into the market after analysis showed increased demand for foreign currency. One tranche was valued at $25 million, while another amounted to $30 million, both supplied through the interbank foreign exchange market.

Selling US dollars to support the market is no different from selling gold, both are reserve assets. These transactions are part of active reserve management aimed at ensuring market stability and meeting the economy’s foreign exchange needs.

A cabinet minister indicated that proceeds from the sale of gold would be used to finance development projects. You have said the sale was aimed at increasing dollar liquidity. Could you clarify the primary purpose of the gold sale?

Operations of the Bank of Tanzania are governed by Section 5 of the Bank of Tanzania Act, which outlines the institution’s responsibilities. When the central bank sells gold, classified as an investment asset, it earns profits from that transaction as part of its reserve and asset management operations.

Gold is one of several reserve tranches under the central bank’s asset allocation framework. The gold tranche was capped at 20 tonnes, which at current prices is valued at more than $3 billion. Against total foreign exchange reserves of about $6.5 billion as of December 2025, gold therefore accounts for over 30 percent of total reserves.

Holding such a large share in gold carries risks, particularly due to price volatility. While gold prices are currently high, they can decline sharply. Based on risk assessments conducted by the central bank, it was deemed unnecessary, and potentially risky, to maintain such a large exposure in gold, prompting the decision to sell part of the holdings.

The resources generated from the gold sale constitute profits for the central bank. As a public institution and banker to the government, these profits are ultimately transferred to the government. While the central bank itself does not fund development projects, part of the proceeds transferred to government may be used to finance public projects, in line with existing fiscal and legal frameworks.

Is the decision to sell part of the gold reserves entirely a decision of the central bank, or was there any directive or influence from the central government?

This idea has always been part of the plan and was not driven by any new government directive. From the outset of the domestic gold purchase programme, there was a clear strategy, approved by the board, which included the possibility of selling part of the gold reserves at an appropriate time.

The Bank of Tanzania operates strictly within the law. Section 51 of the Bank of Tanzania Act clearly mandates the central bank to maintain reserves sufficient to cover at least four months of imports. With total reserves currently valued at about $6.5 billion, Tanzania is able to cover approximately five months of imports.

The decision to sell part of the gold reserves is therefore consistent with long-standing reserve management plans and statutory requirements, rather than a reaction to short-term pressures.