The Bank of Uganda (BoU) has signed contracts with two companies to begin supplying gold under the Domestic Gold Purchase Programme, in a move aimed at increasing Uganda’s earnings from the gold industry and strengthening the country’s foreign reserves.
The agreements were signed with EuroGold Refinery Ltd and Feldstein Trading Limited, marking a significant step in the central bank’s plan to start purchasing gold locally. BoU Director of Research Dr Adam Mugume confirmed that the contracts had been sent to the refineries and signed, paving the way for the programme to commence.
Under the arrangement, the central bank plans to begin purchases with about 100 kilograms of gold valued at approximately $160 million (Shs592 billion), as part of efforts to promote domestic gold trade and reduce reliance on re-exports.
The initiative comes at a time when Uganda’s gold exports remain vulnerable to external shocks, particularly due to tensions in the Middle East, which is a key market for the country’s gold. Hong Kong has recently emerged as the second-largest destination for Uganda’s gold exports after the United Arab Emirates, with most of the exported gold being re-exports rather than locally produced.
According to BoU, Uganda’s export earnings reached a record $14.4 billion in 2025, largely driven by strong performance in gold, coffee, and tourism. Gold alone contributed $5.8 billion, representing a 44 percent increase, while coffee exports earned $2.4 billion and tourism generated $1.7 billion in the 2024/25 financial year.
However, Dr Mugume noted that Uganda earns limited value from gold exports because most of the gold is imported and re-exported, with the country mainly benefiting from tax revenue of about $200 per kilogram and annual value addition estimated at between $50 million and $100 million.
He warned that any disruption in the Middle East market or reduced demand from Hong Kong could lead to a proportional decline in both gold imports and exports, given that the two are closely linked.
The Domestic Gold Purchase Programme is expected to support Uganda’s local gold value chain by ensuring that the central bank only buys refined gold domestically, promoting value addition and transparency in the gold trade.
BoU’s move aligns with a growing global trend of central banks increasing gold reserves to strengthen financial stability and diversify assets, as Uganda seeks to secure its economy against external market shocks and maximise benefits from its natural resources.
Leave a Reply