ACCRA/DAR ES SALAAM/KAMPALA – Ghana, Tanzania and Uganda face the highest risk in Africa of a sharp drop in their foreign-exchange reserves if global gold prices suddenly tumble, Fitch Solutions’ BMI unit has warned.
The three countries rely heavily on bullion for export revenues, with gold accounting for as much as 45% of Ghana’s export receipts, 42% for Tanzania, and 35% for Uganda, according to BMI data.
A sudden slump in gold prices would not only reduce the value of their gold reserves but also squeeze foreign-currency inflows, ultimately weakening non-gold reserves as well.
“A bullion price slump will deflate the value of their gold reserves, by extension the inflows of foreign currency, and see non-gold reserves suffer as well,” said Orson Gard, senior analyst for sub-Saharan Africa at BMI, during an online briefing on Wednesday.
BMI’s base forecast for 2025 pegs gold at $3,100 per ounce, which is still high by historical standards. However, the firm believes the recent rally has peaked.
Gold prices have surged nearly 26% this year to $3,298.54 per ounce, driven in part by central banks increasing purchases to reduce exposure to US assets amid a global trade war triggered by former US President Donald Trump’s tariffs.
The World Gold Council says central banks plan to maintain their gold buying programmes over the next year.
Other African nations with gold in their reserve portfolios or plans to add it include Burkina Faso, South Africa, Nigeria, Rwanda, and Kenya.
However, beyond the risk of falling prices, BMI warns that liquidity could become a major issue. Gold can be difficult to quickly convert into more liquid assets such as foreign exchange or short-term securities — a challenge for countries that depend on gold exports to maintain external solvency.
“This would be especially problematic for countries that are also reliant on gold export receipts as a means of preserving external solvency,” Gard added.
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