BoU launches domestic gold purchase pilot to boost reserves

KAMPALA, April 21, 2026 — The Bank of Uganda [BoU] has launched a three-year pilot Domestic Gold Purchase Programme aimed at strengthening the country’s foreign exchange reserves by buying and processing locally mined gold.

Test purchases under the programme began on April 17, marking a significant policy shift as the central bank moves to diversify its reserve assets beyond conventional instruments.

In a statement issued on April 20, the Bank said the initiative is designed “to build and diversify Uganda’s foreign exchange reserves portfolio by purchasing and processing domestically mined gold and including it in the reserves.”

Bank officials said the move would “strengthen reserve adequacy and reduce risks associated with conventional reserve instruments,” particularly in the face of global market volatility.

Under the scheme, the Bank will purchase gold from eligible, prequalified licensed miners, with payments made in Uganda shillings based on prevailing international prices. The gold will then be delivered to approved refineries for assaying before being stored by the central bank.

“Once refined to meet international monetary gold standards and certified, the gold will be incorporated into Uganda’s official foreign exchange reserves,” the statement added.

Authorities expect the programme to also accelerate the formalisation of Uganda’s gold sector by promoting local value addition and improving economic linkages across the mining value chain.

Over the three-year pilot phase, the Bank will test the full process, from procurement to reserve inclusion, while strengthening traceability systems to ensure transparency and accountability.

The programme is built around a strict chain-of-custody framework developed with the Ministry of Energy and Mineral Development, aimed at tracking gold from mine site to export.

“This traceability mechanism provides visibility across the supply chain, enabling verification of gold origin and safeguarding the integrity of the programme,” the Bank said, noting that it aligns with regional requirements to curb illicit mineral flows.

The central bank has secured a Mineral Dealer’s Licence from the ministry and is registered with the Financial Intelligence Authority as an accountable entity for anti-money laundering and counter-terrorism financing compliance.

Officials said the pilot phase would allow the Bank to refine operational systems and controls before scaling up the initiative.

“The controlled three-year pilot will enable us to test operations, strengthen controls and apply lessons learned,” the statement said.

The programme follows extensive preparatory work under a high-level intergovernmental committee comprising key agencies, including the Ministry of Finance, the Uganda Revenue Authority, the National Environmental Management Authority, and the Uganda National Mining Company.

Uganda joins countries such as Ghana and Tanzania, which have incorporated gold into their reserve management strategies by leveraging domestic production.

The Bank said the initiative also supports the government’s long-term economic growth agenda, positioning mineral development as a key driver.

“The Bank of Uganda remains committed to implementing the programme in a prudent, transparent and accountable manner, consistent with its mandate and international best practice,” the statement concluded.

According to the latest Performance of the Economy Monthly Report released by the Finance ministry, Uganda’s gold export earnings more than doubled in February 2026, increasing by 156.7 per cent to US$ 818.16 million from US$ 318.71 earned in the same period last year. “This surge was attributed to rising global gold prices, supported by increased demand for the metal as a safe-haven asset amid geopolitical uncertainties, as well as continued reserve diversification by central banks,” says the report.

https://thecooperator.news/bank-of-uganda-report-hails-national-economy-amid-global-uncertainty/