Ugandans are set to earn big from gold sales as the Bank of Uganda (BOU) initiates a Domestic Gold Purchase Programme which is aimed at building the country’s foreign reserves and minimizing associated risks on reserves investments in the international financial markets.
The gold purchase programme will involve purchasing gold directly from the artisanal and small scale miners, which also in part, is to support the miners’ livelihoods with a positive spill-over effect on other sectors of the economy in line with the Bank’s mission to support socio-economic transformation.
BOU in consultation with relevant key stakeholders, released the details of the gold purchase program in its much anticipated State of the Economy report which presents economic developments in Uganda up to the three months to May 2024.
The Bank also expects the program to support the government’s ongoing value addition to minerals and the import substitution strategy by reducing the imports of raw gold into the country.
However, the Bank notes that imports are expected to remain high in the medium term in line with increased public investment in infrastructure.
“With the BOU plan to purchase gold locally from the artisanal miners to complement existing measures to accumulate international reserves, imports of raw gold are expected to reduce, contributing to the reduction in total imports, in turn leading to a decrease in both trade deficit and current account deficit,” a statement reads in part from the report.
According to the report details, gold has continued to maintain a three-year rise amid haven flows and central banks buying, registering a 12.4 percent increase in the three months to May 2024 reaching an average of USD 2,351 per troy ounce in May 2024. This largely reflects resilient global economic activity, and strong industrial and infrastructure investment in China.
Uganda’s gold exports quadrupled to USD 139 million (UGX 514 billion) after the tax disputes on gold exports that had led to the halting of gold trade were resolved.