Tanzania will sell gold reserves to fund infrastructure spending

Tanzania plans to sell part of it gold reserves to finance spending on infrastructure projects, as it faces reduced donor funding amid a broader shift away from development aid.

President Samia Suluhu Hassan instructed the central bank to proceed with a partial sale of its gold holdings, Minister of State in the President’s Office Kitila Mkumbo said at a briefing in London on Monday, without providing further details. The Bank of Tanzania held 3.3 trillion shillings ($1.3 billion) of bullion at the end of December, according to data published last week.

“Governments are no longer interested in providing aid to Africa so we are reorganizing ourselves,” Mkumbo said.

Tanzania has been buying gold from miners in the country since 2023. Its move to sell the metal comes at a time when the prices is at a record high.

African nations are facing less predictable budget support and concessional funding as governments in the US and Europe slash foreign development aid to focus on domestic pressures like defense spending. The Trump administration’s dismantling of USAID last year resulted in a 17% drop in international foreign aid last year, OECD estimates show.

In addition, Tanzania has faced criticism by the European Union after Hassan was declared the winner of a disputed election, triggering protests in which hundreds of people were killed by the East African nation’s security forces. In November, the EU parliament adopted a non-binding resolution to suspend implementation of a €156 million ($185 million) support program to Tanzania.

(By Kanika Saigal)