Total gold accumulated stands at $3.24 billion — 18.9 tonnes, roughly 36 percent of Tanzania's total foreign assets. Holdings had surpassed the board-approved ceiling of $3.0 billion, triggering the rebalancing decision.
The debate about Tanzania's gold reserves has produced more heat than light.
When Minister of State in the President's Office Investment and Planning, Prof Kitila Mkumbo, confirmed in London that President Samia Suluhu Hassan had directed the Bank of Tanzania to proceed with a partial sale of its gold holdings, public conversation split into two camps: those insisting this is routine central banking and those who fear the country is pawning the family silver under technocratic language. Both are missing the more consequential question.
The question is not whether Tanzania can sell its gold. It can. The question is what the decision reveals about the structural vulnerability of Tanzania's development financing model — and whether we are addressing that vulnerability or merely managing its symptoms.
The Bank of Tanzania held foreign exchange reserves of $6.52 billion as of January 29, 2026, with monetary gold at $1.2 billion.
Total gold accumulated stands at $3.24 billion — 18.9 tonnes, roughly 36 percent of Tanzania's total foreign assets. Holdings had surpassed the board-approved ceiling of $3.0 billion, triggering the rebalancing decision.
This is technically correct. However, it is also incomplete as an explanation.
Gold surpassed $5,100 per ounce on January 26, 2026 — a 64 percent appreciation year-on-year. The timing is defensible and none of this is abnormal. What is not routine is the confusion about what the decision actually is.
Within 24 hours of Minister Mkumbo's London statement, a different account emerged.
Where the Minister said the Bank had been instructed to sell gold to "get money for infrastructure," the BoT's Director of Financial Markets told reporters the next day that the sale is strictly a reserve management decision, made independently by the Bank, with proceeds not channelled to government projects.
Two official voices. One episode. Incompatible explanations.
This is not a minor discrepancy. When the minister responsible for planning describes a central bank operation one way, and the central bank contradicts him the next morning, the question is not who is right.
The question is why there is no single, authoritative, transparent account of what is happening with a national strategic asset.
Official Development Assistance to Tanzania has collapsed — from $761 million in 2013 to approximately $118 million in 2025, a decline of 84 percent.
The OECD projects a further drop of up to 17 percent in global foreign aid this year.
The European Parliament voted in November 2025 to suspend a €156 million support programme following the disputed October election. Minister Mkumbo confirmed that international partners had withheld between $2 and $3 billion of Tanzania's $10 billion development budget in response to post-election events.
When he added that "governments are no longer interested in providing aid to Africa, so we are reorganising ourselves," he was stating a geopolitical reality.
However, reorganisation is not restructuring — and the difference is the distance between surviving a crisis and building a system that does not create one.
Tanzania's gold sector generated $4.7 billion in exports in 2025 — a 37 percent increase from the prior year. Mining contributes over 10 percent of GDP and 15 percent of tax revenues. We are one of Africa's leading gold economies.
Yet the mechanism for converting mineral wealth into infrastructure financing, without dependence on aid or reserve liquidation, remains underdeveloped.
Professor Anna Tibaijuka has asked the pointed question: can Tanzania demonstrate that infrastructure spending generates returns commensurate with resources deployed? Bishop Bagonza of the Karagwe Diocese has made the governance point most directly: decisions of this magnitude require parliamentary transparency, not only executive direction.
The overnight contradiction between the Minister and the central bank suggests he is right.
Three things would convert this episode into something structural: a legislatively anchored mechanism capturing mineral revenues into a ring-fenced development fund; a deeper PPP financing pipeline, because Tanzania's $15 billion FDI target requires blended finance and private capital; and a parliamentary oversight framework so that decisions of this scale are made with one voice, not two contradictory ones 24 hours apart.
Tanzania's gold is not being squandered. The Bank of Tanzania's reserve management appears financially rational.
However, national conversations about strategic assets must be driven by governance and transparency, not rationality alone.
Gold at $5,100 an ounce is an asset.
A coherent development financing framework is a foundation. We should not mistake one for the other.
Amne Suedi is Founder and Managing Director of Shikana Investment and Advisory, International Business Lawyer, Honorary Consul of Switzerland in Zanzibar, Chairperson of the Switzerland-Tanzania Chamber of Commerce, and former Board Member of the Tanzania Investment Centre. You can reach her at [email protected]
