Tanzanian President, John Magufuli , has ordered the country’s central bank to create a gold reserve to run parallel with the country’s present system that solely relies on storing dollars as a measure to control mining exports from this East African state which is the continent’s fourth largest producer of the mineral.
“We should start buying gold; the central bank must invest in this. We must have our reserves in dollars but also our reserves in gold, because gold is money,” Magufuli said at a ceremony in Dar es Salaam Wednesday.
Magufuli is intent on regulating his country’s mining sector, which has faced allegations of fraud and under-reporting of production and profits, and has locked horns with foreign mining companies.
“There are still many problems in the mining sector,” he said.
“For example, according to recent reports, Tanzania is not the biggest gold exporter in east Africa, even though we know we are the biggest gold producers in the region,” he said, without naming the report or the country topping Tanzania.
“We are not profiting from our gold as we should,” he added.
Magufuli said that mineral smugglers considered Tanzania to be “an immense country brimming with minerals, with gold, with everything, but a territory of people who are asleep.”
In a bid to crackdown on mineral smuggling, Magufuli last year inaugurated a 24-kilometre wall around the country’s tanzanite mines, a violet-blue stone unique to the country.
In 2017, a government commission said fraud in the mining sector had cost Tanzania $84 billion over 19 years and blamed foreign companies for failing to declare revenues. Also that year, the country slapped a bill of $190 billion in unpaid taxes and interest on Acacia Mining, a subsidiary of Canadian mining giant Barrick Gold, and negotiations are still ongoing.