Global market data shows that the price of gold rose sharply between 1 and 28 January this year, averaging around $5,500 per ounce, up from about $4,300—an increase of 26 percent over the period. Compared to last year, gold prices have climbed by about 60 percent.
The Manager of the Foreign Markets Department at BoT, Mr Emmanuel Akaro, said that while a gold sale plan exists, it is strictly a reserve management decision and not linked to government spending.
"The plan to sell exists; when we sell depends on market conditions. Gold prices have risen sharply in a short period," he said.
He explained that if BoT were to sell all its monetary gold at current prices, valued at more than $3.18 billion, the country could earn over Sh7.14 trillion. Since the gold was purchased at a cost of Sh5.24 trillion, such a sale would yield a profit exceeding Sh1.6 trillion. However, he stressed that timing is crucial due to the volatility of gold prices.
Akaro emphasised that decisions to sell gold are made independently by the Bank and are not influenced by government pressure. As an autonomous institution, BoT determines which foreign assets to invest in, and in what amounts, based on board decisions.
He noted that while the Bank exists to support the Government, its investment strategy prioritises safety and liquidity to meet external payment obligations when required.
"If you invest in unsafe instruments and thethe Government needs to make external payments, that becomes a national security risk. That is why we invest in instruments with very low risk, so funds can be released when needed," he said.
Proceeds from gold sales, Akaro added, are reinvested in foreign currencies such as the US dollar. BoT only sells gold at market prices and does not incur losses, paying particular attention to European market prices.
"We sell to obtain value. If one ounce is worth $5,590, that is what we expect to receive," he explained.
Akaro said the minimum level of gold reserves was set at $2 billion following a comprehensive risk analysis, while the ceiling has now been raised to $3 billion. Any holdings above that level are considered eligible for sale to lock in profits, even as the Bank continues to purchase gold.
"When we started this programme, the ceiling was$350 million, later increased to $700 million as prices rose. It was then adjusted to $2 billion, and now to $3 billion," he said.
Since BoT continues to buy gold daily, the Bank has opted to sell some of the gold acquired earlier to realise profits, which officials say will ultimately benefit the Government. At the same time, ongoing purchases aim to boost foreign exchange reserves, support the domestic gold market, and enhance the capacity of local firms involved in value addition.
BoT began its gold purchase programme on 1 October 2024 as part of efforts to strengthen foreign exchange reserves.
The Bank maintains specific thresholds for gold holdings, noting that excessive exposure to a single asset poses financial risks.
As of 29 January, the central bank held gold worth $3.24 billion, equivalent to 18.9 tonnes, after beginning the exercise on 1 October 2024.
"As of 29 January 2026, Tanzania’s foreign exchange reserves stood at $6.52 billion, held in various foreign assets, including gold. Of this amount, $3.84 billion, or 59 percent, was in gold. Monetary gold alone was valued at $1.18 billion, while refined gold that has not yet attained monetary status brought total gold holdings to $3.24 billion."
He said gold currently accounts for 36 percent of Tanzania’s external assets, while the Chinese yuan ranks second, with holdings equivalent to $735 million, representing 11 percent of total foreign reserves.
Akaro cautioned that assets which rise in value can also fall, highlighting the need for prudent risk management. When gold holdings exceed the desired level, the Bank considers selling a portion to rebalance its portfolio.
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