Tanzania is weighing the sale of part of its gold reserves to finance infrastructure projects, Planning and Investment Minister Kitila Mkumbo said on Monday during a visit to London. The proposal follows instructions from President Samia Suluhu Hassan to the central bank. The government is seeking alternatives as external funding declines. “Traditional development aid to Africa is drying up, and we have to adjust,” Mkumbo said. The Bank of Tanzania has been instructed to arrange a partial disposal of the reserves, Bloomberg reported. Officials have not disclosed the size of the sale, the timing, or the execution method. Central bank data released last week show Tanzania held gold reserves valued at about $1.3 billion at the end of December 2025.
Declining aid budgets
Donor funding has weakened as several Western governments cut aid allocations. Spending has moved toward domestic priorities, particularly defence and security. In the United States, policy changes under President Donald Trump led to the closure of USAID. The agency had channelled bilateral assistance for more than sixty years. In early 2025, the United Kingdom announced plans to reduce its aid budget from 0.5% to 0.3% of gross national income by 2027. The savings will be redirected to defence and security. France, Sweden, the Netherlands and Germany have also scaled back development spending, according to media reports.
For Tanzania, the timing is sensitive. Relations with the European Union have remained strained since the disputed presidential election of October 2025. The vote returned Samia Suluhu Hassan to office. In November, the European Parliament passed a non-binding resolution calling for the suspension of a €156 million aid programme. The European Commission has said discussions with Tanzanian authorities are continuing.
Gold and the mining economy
Gold remains a key source of export earnings and public revenue for Tanzania. The country ranks among Africa’s largest gold producers. Output was estimated at 52 tonnes in 2023, according to the World Gold Council. Bank of Tanzania data show gold accounted for 22.5% of total exports that year. Export earnings reached roughly $3.05 billion. Over the same period, the mining sector contributed about 9.9% of gross domestic product. It also generated close to 15% of tax revenues. Oversight of the industry has tightened in recent years. In September 2023, authorities launched a programme allowing the central bank to buy gold directly from local miners. The aim was to support foreign exchange reserves. In 2024, mining companies and traders were required to remit 20% of their gold export proceeds to the Bank of Tanzania.
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