As the political and economic uncertainty rises globally, African countries are working towards strengthening their gold reserves to achieve stability and offset the forthcoming global economic shocks. Gold has always been a workable alternative to USD investments, and its lower volatility compared to other financial instruments makes it a favorable alternative to fiat currencies and securities.
Here are a couple of interesting statistical facts about HOW rich Africa is in gold:
- The country with the largest gold reserves – 174 metric tons – is Algeria.
- South Africa also has some of the largest gold holdings, with an estimate of 125 metric tons.
- Libya holds 117 metric tons of gold.
- Egypt has 80.73 metric tons of gold in its reserves.
Besides these impressive holdings, many African countries are actively engaged in gold mining and manufacturing, with the West Africa region’s leaders including Ghana, Mali, Burkina Faso, and the Republic of Guinea (according to the 2023 GlobalData estimates). The largest active gold mines in Africa are located in Loulo-Gounkoto, Ahafo, Fekola, Tarkwa, Essakane, Akyem, and Hounde. Most of Ghana’s gold comes from the Bibiani mine.
The leading gold mining corporations present in the country are Allied Gold, AngloGold Ashanti, Barrick Gold, and Endeavor Mining, among others. Endeavor Mining has the largest-scale operations in the African continent, with a focus on low-cost, sustainable mining in the West African region. It operates several mines in Ivory Coast and Burkina Faso, also working on greenfield exploration in Niger, Mali, and Guinea.
Some other countries with rich gold fields are considering foreign investment as a path to exploring their golden potential: Ivory Coast, Senegal, and Sierra. However, African gold mining activity is predicted to reduce by a CAGR of around 2% due to the number of negative regional factors, such as:
- Schedule closures in Ghana’s mining sites.
- Political instability.
- Unregulated, illegal mining activities.
Thus, Africa faces a number of challenges on the way to exploring its full golden potential, mining its gold fields, and using gold reserves for the economic development of states. Notably, gold production is one of the key areas in which African states hold global dominance, with Africa being the second-largest gold producer in the world after Asia.
What’s more, African countries derive resources for economic development from their gold mines and lucrative partnerships with Western mining companies. Therefore, it is vital to prioritize gold production, new mine exploration, and new ways of using gold reserves to benefit African nations, such as gold tokenization and broader use in financial transactions across the continent. Given the large digital divide in Africa and the lack of access of large population groups to digital financial instruments, tokenized gold can be of immense help in moving the payment sector forward.
Projects like Clinq.Gold are meant to diversify the use of gold in African countries, helping Africans gain access to finance through gold-backed tokens and conduct frictionless, affordable money transactions in their countries and offshore. This way, African gold acquires a new, technologically advanced application and serves as a flexible and accessible financial instrument in the continent.
CEO & Founder at Clinq.Gold, Bank of Bullion | Keynote Speaker