KAMPALA– The Bank of Uganda (BoU) announced Wednesday it will exclusively purchase locally mined gold under its new Domestic Gold Purchase Programme, an initiative aimed at rebuilding the country’s foreign reserves.
Under the program, the central bank plans to acquire between seven and 10 tonnes of gold annually, at prevailing international market prices.
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Dr. Adam Mugume, the Bank of Uganda director for research, told reporters in Kampala that the central bank is in advanced stages of implementing the gold program, with at least seven potential suppliers currently under evaluation.
“We shall start buying gold very soon. We are currently developing a chain-of-custody to ensure only gold mined in Uganda is purchased,” Mugume said. He also indicated that the BoU would procure a reputable refinery to test gold purity and origin.
“We will only pay for the gold after testing for purity levels by a reputable refinery we will have contracted. This approach will eliminate both imported and fake gold,” Mugume added, clarifying that imported gold will not be considered under the program.
While the exact amount of gold mined domestically is difficult to ascertain, Mugume noted that Uganda possesses “sufficient gold ore deposits estimated at 30 million tonnes.” Gold remains Uganda’s leading foreign exchange earner, though a large percentage of current exports are re-exports from neighboring countries like Tanzania, Zimbabwe and the Democratic Republic of Congo. Uganda currently exports approximately 3,995.3 kilograms of gold monthly, totaling about 47,997 kilograms annually.
The BoU first announced its intention to initiate the Domestic Gold Purchase Programme in July last year to bolster foreign reserves, which had been impacted by the COVID-19 pandemic. As of June 30, 2025, Uganda’s foreign reserves had grown to $4.2 billion, equivalent to 3.6 months of future imports of goods and services, slightly higher than the 3.6 months recorded in June 2024.
According to the BoU’s State of the Economy report for June, the gold purchase program seeks to mitigate reserve declines and address risks in international financial markets. The initiative is also expected to support the government’s efforts in mineral value addition and import substitution by reducing raw gold imports. By purchasing directly from artisanal miners, the central bank aims to support the livelihoods of small-scale miners.
Mugume noted last year that the BoU was “in the process of diversifying international reserves to include monetary gold,” with locally mined gold processed to at least 99.5% purity before conversion. He added that purchasing foreign currency from the domestic market had been constrained by dwindling budget support and higher interest rates, which have limited financial flows into emerging economies like Uganda.
BoU data indicates that Uganda’s donor inflows have sharply declined by 84% in just two years, plummeting from $905 million in June 2023 to just $146.4 million. This reduction has prompted the BoU to join other central banks worldwide that have added billions of dollars worth of gold to their international reserves in recent years. Globally, central banks added $20 billion worth of gold to their international reserves in the third quarter of 2022, according to the International Monetary Fund.
