Dodoma. Minister for Finance, Dr. Mwigulu Nchemba, has announced that the signing of gold purchase and refining agreements between the Bank of Tanzania (BoT), mining companies, and the Geita Gold Refinery (GGR) will provide the central bank with reliable sources to implement its Domestic Gold Purchase Programme.

Speaking during the signing ceremony, Dr. Nchemba said the move will also support local gold refining industries in achieving international accreditation, particularly from the London Bullion Market Association (LBMA).

“This gold purchase programme reflects the government’s commitment, under the leadership of President Samia Suluhu Hassan, to build sufficient foreign exchange reserves, increase the contribution of minerals to the national economy, and enhance value addition in the mining sector,” Dr. Nchemba stated.

Launched in the 2022/23 fiscal year, the Domestic Gold Purchase Programme provides an opportunity for gold sellers to sell directly to the central bank at competitive international market prices. The goal is to increase the share of gold in the country’s foreign exchange reserves and enhance their sustainability.

Bank of Tanzania Governor Emmanuel Tutuba emphasized that the programme is part of a broader national strategy to reduce reliance on external borrowing as the primary source of foreign reserves and to strengthen financial independence using the country’s natural resources.

“As of June 13, 2025, the central bank has purchased 5,022.85 kilograms of pure gold, valued at approximately USD 554.28 million, surpassing its annual target of adding USD 350 million in foreign reserves for the 2024/25 fiscal year,” said Governor Tutuba.

He said between October 1, 2024, and June 13, 2025, the central bank purchased gold through local refineries based on principles of transparency, competitive pricing, and efficiency, while ensuring the gold meets international standards.

“The gold was refined at the following facilities: Mwanza Precious Metals Refinery (MPMR) – 3,181.3 kg; Eyes of Africa (EOA) – 979.5 kg; and Geita Gold Refinery (GGR) – 385.6 kg,” he added.

Minister for Minerals, Antony Mavunde, said the agreements would enable the central bank to secure adequate gold for its reserves while also spurring domestic value addition in the mining sector.

“Section 100D of the Mining Act prohibits the export of minerals without value addition,” Mavunde emphasized.

Despite these achievements, Governor Tutuba pointed to several challenges, including legal obstacles related to the purchase of by-products like silver, which are not currently recognized under the law as commodities the central bank can buy or sell.

“We recommend urgent legal reforms to allow the central bank to purchase and trade in by-products, which would improve the overall efficiency of the gold acquisition process,” said Tutuba.

Another challenge is the lack of LBMA certification for local gold refineries, forcing the central bank to engage in costly gold swaps to acquire internationally recognized monetary gold.

Addressing these issues, Finance Minister Mwigulu Nchemba acknowledged the challenges, including VAT complications on refining costs and fees associated with converting gold for external storage. He assured the public that the government would address all of them in accordance with the law.

“Our goal as a nation is to maintain sufficient gold reserves as part of our foreign exchange holdings, especially since gold prices have consistently risen year after year,” he stressed.

He further urged local refineries to capitalize on the growing volume of gold sold domestically and improve their refining capacities to meet international quality standards required for LBMA certification.

Jackline Kuwanda is a journalist for The Chanzo. Contact her at: jaquelinevictor88@gmail.com