An African Gold Bank? Implications for Gold Producing, Refining Countries Plans are finanlised for the establishment of a pan-African gold bank which proponents say will help countries maximise benefits from their resource.
This follows the signing of a Memorandum of Understanding between the African Export – Import Bank (Afreximbank) and the Central Bank of Egypt (CBE) for the establishment of the African Gold Bank.
According to the MoU, this “strategic initiative” aims to formalise gold value chains, strengthen Central Bank reserves and reduce “Africa’s reliance on foreign refining and trading hubs”.
The establishment of the Gold Bank programme is in line with Egypt’s vision to expand strategic partnerships and strengthen mutual collaboration with African states across diverse fields, as well as Afreximbank’s focus on promoting and accelerating value addition, and strategic mineral processing.
The partnership also builds on a shared vision between the CBE and Afreximbank to support domestic manufacturing, enhance sustainable development, and deepen regional financial and trade integration, fostering a robust and advanced African economic ecosystem.
Under this MoU, the two institutions will collaborate on commissioning a feasibility study to assess the technical, commercial, and regulatory requirements for developing an integrated Gold Bank ecosystem in a designated free zone in Egypt, with the participation of African countries.
This includes the establishment of an internationally accredited refinery, secure vaulting facilities, and associated financial and trading services. All this comes as African countries are building more gold refineries on top of other initiatives aimed at adding as much value to gold as possible before it is exported.
With the Egypt-based initiative getting the backing of a powerful financial institution like Afrexim, there are concerns that refineries in countries like Uganda and Rwanda, most of whose raw materials are said to be from other countries, could lose the business to the pan-African venture.
The initiative also targets the expansion of its scope across the continent, the engagement of governments, central banks, mining companies, and industry stakeholders to strengthen institutional collaboration, harmonize best practices, and facilitate the sustainable trade of gold and related services across Africa. According to Afreximbank President George Elombi the initiative will aligning efforts and resources to promote financial stability, and contributing to sustainable economic prosperity across Africa.
Said Elombi: “It has tremendous economic consequences for our continent. We make a bold declaration that Africa’s gold must serve African people.”
”The African Gold Bank will help us to begin to fundamentally alter the way we extract, refine, manage, value, store, and trade our gold resources, with the primary aim of retaining value on the continent. By effectively building up the gold stock, as other major economies have done, we enhance the continent’s resilience, minimise vulnerability to external shocks, improve currency stability and convertibility, and create wealth within the continent.”
This development comes as gold has overtaken coffee, tourism and diaspora remittances to become the largest single source of foreign exchange for Uganda.
The industry has been growing in terms of exports over the last 10 years with establishment of gold refineries, though there was a two-year decline in 2022 over a dispute between the government and mining companies regarding taxation.
Currently, Uganda’s annual gold export “earnings” are said to have grown to USD 3.8 billion as of 2025, a third of the country’s total exports.
The fear of Uganda’s gold industry is that most of its refined and exported gold, with some putting the figure at more than 80 percent, is not sourced locally but from neighbouring countries, including in restricted Eastern Democratic Republic of Congo and South Sudan especially through Rwanda.
Official figures, however, show large imports from Tanzania, which itself is a major African producer.
Rwanda also started refining and exporting gold in 2020 at its Gasabo refinery following the closure of Aldango a year before, which was accused of criminal activities regarding gold from Congo. The country got USD 1.5 billion from gold exports in 2024, out of about USD 2.3 billion in total export earnings.
Effect of pan-African refinery on EA gold:
It is not yet clear how big the capacity of the Afrexim/ECB-powered refinery would be, but it is expected to attract a share of the African gold market, possibly attracting raw gold exporters at the expense of the refineries in East Africa like Uganda and Rwanda.
The two countries are constantly under scrutiny over their sources of gold as they do not have mines large enough to meet the demand of the refineries and huge export earnings.
The fact that refineries in East Africa are not internationally certified, makes it hard for them to access the major formal and lucrative international markets like Europe and USA, instead heavily relying on the Middle East, especially the United Arab Emirates.
However, Egypt being at the intersection of Africa, the Middle East and Europe, it is expected to leverage that to dominate the market, according to the words of Hassan Abdalla, the Governor of the Central Bank of Egypt.
”With its strategic geographic location at the crossroads of Africa, the Middle East, and Europe, Egypt is well positioned to serve as a natural hub for regional gold trade and financial innovation,” says Abdalla.
African countries should therefore work on improving the industry regulations to gain better international reputation so as to be able to compete. Uganda’s Ministry for Mineral Development has increasingly tightened regulations on gold trade, with the operationalisation of the Mining and Minerals Act, 2022. These include directive that all gold trade is restricted to license holders, meaning that any perspective traders also have to register on the government’s Mining Cadastre and Registry System (MCRS).
To apply, a prospective mineral dealer pays UGX 500,000 application fee and UGX 10 million for the annual licence, proof of financial capacity and compliance with tax laws. All gold can only be traded on proof of authenticity by the regulators.
Energy and Mineral Development Minister Ruth Nankabirwa says the regulations are not only for monitoring gold movements for revenue purposes, but to ensure transparency on the global market, which should create trust amongst players.
On the fears of price competition, Uganda and her peers are expected to rely on the low cost of accessing gold in the region.
Midas Africa Gold Co. is a registered gold dealer, saying it deals directly with miners, especially artisanal (small-scale mining communities), stressing that the gold they sell is therefore conflict-free and ethically sourced.
They say that reaching the miners themselves ensures they get gold at low prices and therefore sell to refiners and competitive prices too “ensuring that they get high-quality gold bars at a price lower than most global markets.”
Uganda has at least five major gold refineries; Gold Refinery Uganda Ltd, Bullion Refinery Ltd, Victoria Gold Star Refinery, Kampala Gold Refinery, and Istanbul Gold Refinery Uganda.
In another development, the Bank of Uganda is finanlising plans to purchase gold from the domestic market. Its main aim is strengthening reserves and reducing dependency on international financial markets.
However, how this impacts on the market will depend on the final approved purchase system, but payments will be made in the local currency. The Bank says prices will be benchmarked on the Bloomberg Composite Gold Index, but adjusted for purity and delivery.
BoU Governor, Michael Atingi-Ego has stressed that they will only buy gold locally mined, from artisanal small scale, medium and large scale miners and refiners as part of the efforts to boost mineral value addition and import substitution.
On the bigger picture, however, the Afreximbank/CBE African Gold Bank and Refinery initiative aims to keep Africa’s gold value on the continent, potentially benefiting producing and refining countries. This is expected to be through increasing formal trade, securing better financing at lower via gold-backed assets, and boosting local refining.
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