African Central Banks Turn to Gold as Dollar Reliance Comes Under Review

African central banks are expanding their gold reserves as part of a broader, cautious shift away from overreliance on the U.S. dollar, driven by currency volatility, geopolitical risk and a desire to strengthen financial buffers.

The value of the region’s reserve assets has surged by 114 per cent over the last three years, with gold playing an increasingly central role in reserve management. Africa’s total central bank reserves rose to $530 billion in 2025, driven by surging gold prices and increased bullion purchases as policymakers moved to strengthen buffers amid global uncertainty.

A number of African central banks have signalled intent to increase gold holdings, both as a hedge against local currency weakness and geopolitical risk, and as a domestically sourced reserve asset that does not require external counterparties. This approach allows countries to build reserves using locally mined gold, reducing the need to acquire foreign currency to do so.

Tanzania’s central bank, for example, had accumulated 27.5 metric tons of gold as of June 2026 under a programme launched in September 2023. Ghana has also announced a scheme to buy 127 tonnes of gold from artisanal and small-scale mining operations to boost reserves and stem smuggling.

The shift is not a wholesale abandonment of the U.S. dollar, but rather a gradual diversification around traditional reserve holdings. A 2026 survey of 93 central banks found that just over half expect their foreign exchange and gold reserves to increase this year, with African central banks the most likely to change the location of their assets, asset classes and currencies over the next 12 months.

The Pan-African Payment and Settlement System, which allows intra-African trade to be settled in local currencies, is encouraging this trend by reducing the transactional demand for hard-currency reserves for trade within the continent. Still, full de-dollarisation remains distant given the depth and liquidity of dollar and euro-denominated markets.

Globally, gold has overtaken U.S. Treasuries as the preferred reserve asset for central banks, now accounting for 27 per cent of reserves, up from 20 per cent a year earlier. By comparison, U.S. Treasuries fell to 22 per cent, highlighting a growing move by countries to diversify away from dollar-based assets.

For African central banks, the trend offers a way to strengthen monetary stability while leveraging the continent’s own gold resources. The challenge now is to manage this transition carefully, ensuring that gold purchases support rather than destabilise broader monetary policy.

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