CENTRAL banks in Africa are turning to gold to protect themselves from economic and geopolitical instability and to diversify their financial portfolios.

In September 2023, the price of gold per ounce was $1,900. A year later, it is selling for $2,500. According to the World Gold Council, an international trade association for the gold industry, demand for the metal is expected to increase in the next 10 months despite the soaring prices.

Some experts, such as Carlos Lopes, a professor at the Nelson Mandela School of Public Governance in South Africa, attribute the African central banks’ gold rush to the need to protect their local currencies.

“In the last few years, because of inflation and all these movements for stimulation packages and the rest, the returns are extremely low,” Lopes said. “On the other hand, gold is going up in terms of price because these big banks are also going after gold as a protection. So, it is a very good investment to go to gold.”

It helps that African gold production has grown by 60 percent since 2010, according to the World Gold Council, higher than a global increase of 26 percent.

In 2022, Zimbabwe launched a gold-backed currency to curb inflation and volatility in foreign exchange rates.

Ghana and Uganda have been buying gold from artisanal miners to bolster their shrinking foreign currency reserves.