KAMPALA — April 20, 2026: The Bank of Uganda (BoU) has taken a significant—yet cautiously scrutinised—step into the country’s gold economy, executing its first purchase under a newly launched Domestic Gold Purchase Programme.
The transaction, carried out on April 17, marks the start of a three-year pilot initiative aimed at integrating locally mined gold into Uganda’s official foreign exchange reserves. The programme is being implemented in collaboration with the Ministry of Energy and Mineral Development.
A Strategic Shift in Reserve Management
Under the scheme, BoU will buy gold directly from licensed miners using Uganda shillings, before routing it through certified local refineries for assaying and processing. The refined gold is then stored in the central bank’s vaults as part of national reserves.
Officials say the move is designed to diversify Uganda’s reserve assets, reduce reliance on foreign currencies, and stabilise the economy against external shocks. Payments to suppliers are pegged to prevailing international gold prices, ensuring competitiveness.
The central bank has also secured a Mineral Dealer’s Licence and entered agreements with prequalified players, including local refiners such as EuroGold Refinery Ltd.
Formalising a Chaotic Sector
Authorities argue the programme could bring order to Uganda’s largely informal gold industry, where artisanal and small-scale miners dominate but often operate outside regulatory frameworks.
By establishing a structured “mine-to-vault” system, BoU says it will enforce traceability through a chain-of-custody mechanism aligned with regional certification standards under the International Conference on the Great Lakes Region.
The pilot targets between 7–10 tonnes of gold annually, building from an initial procurement of at least 100 kilogrammes between March and June this year. Uganda joins countries like Ghana and Tanzania, which have adopted similar strategies to boost reserves and curb smuggling.
Transparency Questions Linger
However, the first transaction has already raised critical questions.
BoU has not disclosed key details surrounding the purchase, including the quantity acquired, the source districts or miners, and the exact pricing. There is also no publicly available documentation confirming the origin of the gold under the promised traceability framework.
This lack of disclosure is likely to fuel scepticism in a sector long plagued by allegations of illicit gold flows, particularly from neighbouring Democratic Republic of Congo.
Risks Beneath the Shine
Global financial institutions, including the IMF, have previously warned that such programmes carry risks—ranging from gold price volatility to governance challenges.
While gold prices have surged in recent years, a downturn could expose the central bank to losses, turning a diversification strategy into a fiscal burden.
Watchdog Perspective
Watchdog Uganda recognises the potential of the Domestic Gold Purchase Programme to transform the mineral sector and strengthen national reserves. But credibility will hinge on transparency.
Are artisanal miners—the backbone of the sector—actually benefiting? Are environmental and social safeguards being enforced? And will the BoU publish regular, verifiable reports on its gold purchases?
For now, the initiative signals ambition. Whether it delivers reform or reinforces existing opacity will depend on what the central bank does next—not what it says.
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