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Tanzania’s mining regulator has directed gold exporters to allocate at least 20% of their gold to the central bank. The central bank started acquiring gold from local traders and miners to enhance its foreign reserves due to the depreciation of the local currency
New mining regulations in Tanzania will obligate gold merchants to provide 20% of their gold to approved refineries. The country’s central bank started acquiring gold from local traders and miners in the previous fiscal year, which ended in June, to enhance its reserves as the local currency, the shilling, depreciated.
According to the report, the apex bank, during the year ending June, managed to purchase around 418 kg of gold to strengthen its reserves and subsequently, the bank is looking to up the purchase to 6 metric tons of gold. Tanzania’s Mining Commission, on Friday, declared that a new mining regulation, starting October 1, will obligate gold merchants to provide 20% of their gold to two approved refineries: Eye of Africa Ltd in Dodoma and Mwanza Precious Metals Refinery Ltd in Mwanza.
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Tanzania, a significant gold market in East Africa, has a solid trade relationship with its neighbours. The gold trade accounts for around 4% of its GDP. Gold mining is also a significant source of employment and foreign exchange revenue for the country. This was the effect of Uganda’s over USD 3 billion gold trade. Uganda often purchases raw gold and resells the refined product. Tanzania became Uganda’s primary gold import source within the East African Community (EAC).
According to the Ministry’s June Performance of the Economy report, Tanzania supplied 83% of all EAC products sourced by Uganda in the year before May. This amounts to Shs1.6 trillion out of Shs1.9 trillion in EAC imports.
