EXECUTIVE SUMMARY –
Geopolitical turbulence, including the arrest of Venezuela’s president, has bolstered gold’s status as a safe-haven asset and driven prices to record highs, with forecasts suggesting further strong gains amid global instability. Africa, which produces around 1,000 tonnes of gold annually, stands to benefit from elevated export revenues, stronger reserves, and increased fiscal receipts—especially in gold-dependent economies like Ghana, Mali, and Burkina Faso—but long-term gains will depend on sustaining output and attracting investment.
Keywords: gold rally, Africa, export revenues, safe-haven asset, geopolitical uncertainty, gold prices, Ghana, Mali, Burkina Faso, central bank reserves, mining sector, fiscal receipts, investment potential
The arrest of Venezuelan President Nicolás Maduro by the Trump administration has added a new layer of geopolitical uncertainty, reinforcing gold’s role as a global safe-haven asset and pushing prices to record levels.
Gold rose more than 2.5% on January 5, climbing to nearly $4,450 an ounce. Since the start of 2025, prices are up 65%, and have gained more than 130% since Russia’s invasion of Ukraine in 2022. Morgan Stanley expects gold to reach $4,800 an ounce by the end of 2026, while JPMorgan has flagged the possibility of prices exceeding $5,000.
Rising geopolitical tensions, US trade disputes, and lower interest rates have weakened the dollar and reduced the appeal of US bonds. Central banks have also accelerated purchases as part of a broader move away from dollar dependence. According to the World Gold Council, central banks bought 1,045 tonnes of gold in 2024, marking a third consecutive year above 1,000 tonnes.
Africa, which produces about 1,000 tonnes of gold annually, stands to benefit from higher prices through stronger export revenues, improved reserves, and higher fiscal receipts, particularly in gold-dependent economies such as Ghana, Mali, and Burkina Faso.
Key Takeaways
Gold’s surge is reshaping Africa’s economic outlook at a time of global instability. While no African country ranks among the world’s top producers, the continent accounts for roughly 25% of global output, making price movements highly consequential. Higher gold prices directly boost export earnings and tax revenues. In major producing countries, mining-related taxes and royalties account for a significant share of public income. For Mali and Burkina Faso, gold represents close to 80% of total export value, magnifying the impact of price gains. Central bank behavior adds another layer. While most sub-Saharan African countries hold limited gold reserves, some are beginning to follow global dedollarization trends. Ghana increased its reserves from 19.5 tonnes to 30.3 tonnes in 2024, and a new pan-African gold bank backed by African Export-Import Bank and the Central Bank of Egypt aims to deepen gold-backed financial systems. Still, risks remain. Efforts to raise state take through tougher mining codes may deter investment over time. In the short term, Africa gains from higher prices. Over the longer term, sustaining output and attracting capital will determine whether the gold boom translates into lasting economic stability.
SOURCE: https://www.dabafinance.com/en/news/gold-geopolitics-africa-prices-central-banks
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