The Central Bank of Tanzania will soon start purchasing large quantities of gold in order to create the country’s first gold reserve with the intention of ensuring state coffers remain stable.
That was revealed during the presentation of the country’s 2023/2024 Fiscal year budget at the National Assembly in Dodoma by the Minister of Finance and Planning, Mwigulu Nchemba.
According to the Minister, Tanzania has finalised procedures to begin purchases of gold through the Bank of Tanzania (BOT) aimed at establishing a National Gold Reserve to strengthen and stabilize its local currency.
With that in pipeline there is the possibility of Tanzania constructing its own gold central bank, similar to the United States’ Fort Knox.
Of late the value of Gold has been on increase and remained so throughout the three years of global pandemic such that in recent months, central banks around the world have increasingly been turning to gold as the preferred safe-haven asset amidst global economic turmoil.
As it happens, Tanzania is fourth-largest producer of gold; however, the country keeps exporting almost all its gold outputs.
Meanwhile latest reports indicate that Ghana is now also regaining the country’s status as the top producer of gold in Africa, surpassing South Africa.
That is according to recent data released by the Ghana Chamber of Mines.
The chamber confirmed that Ghana’s gold output rose from 2.8 million ounces in 2021 to 3.7 million ounces in 2022, driven by growth in both the large and small-scale sectors.
In Tanzania, the Buzwagi and Bulyanhulu gold mines in were predicted to be able to yield an annual 223 metric tonnes of gold.
This could be the highest in Africa and enough to put Tanzania on the list of top global gold producers.
More than a decade ago, a Judge Mark Bomani committee probe team had reported that Tanzania had reserves of 2,222 metric tonnes of gold, waiting to be exploited.
‘Pieces of Eight!’
According to the Third Quarter Gross Domestic Product (GDP) figures released by the National Bureau of Statistics, mining activity in Tanzania grew at the rate of 9.8 per cent during the third quarter of year 2022.
The National Bureau of Statistics Report shows that the growth was mainly driven by an increase in production of Gold, Diamond, Silver, Coal and Natural Gas.
During the third quarter period of 2022 gold production reportedly shot up to 17,516 kilograms, which should be more than a ton compared to the 14,915 kilograms mined during the third quarter of 2021.
On the other hand, Diamond production rose to 74,462 carats during the final quarter of 2022 compared to a measly 19,418 carats produced in the corresponding quarter of year 2021.
Coal mines produced 774,398 tons during the third quarter of 2022 which is a huge increase when matched to the 191,607 tons mined during the same period in the previous year 2021.
Increased diamond production reflected in the minerals’ rising exports that shot up USD 58.6 million, which is more than 15 times earnings when compared to the USD 3.8 million raked in during the third quarter of 2021.
China has been the leader in annual gold production, averaging 450 metric tonnes a year, followed by Australia with the capacity of 270 metric tonnes, according to 2016 data released by the World Gold Council.
Egoli: The Place of Gold
In Africa, the only country ranked, at position nine among the top 10 gold producers, is South Africa, which despite its famed mineral trade essentially lags behind Tanzania in gold production.
Johannesburg’s annual gold production capacity is in the range of 140 metric tonnes.