Bank of Uganda Bolsters Gold Reserves Amid Global Uncertainty

By David Mwanje

The Bank of Uganda’s strategists in Kampala are navigating a shifting global economic landscape, with the U.S. dollar’s dominance under scrutiny and gold emerging as a key asset. The 2025 OMFIF Global Public Investor (GPI) report, surveying 75 central banks including Uganda’s, highlights a trend toward diversification driven by geopolitical risks. For Uganda, where gold mining powers regions like Karamoja and Busia, this shift aligns with a national strategy to strengthen reserves and shield the economy from global volatility.

The GPI reveals that 60% of central banks, including Uganda, plan to diversify portfolios within two years, prioritizing resilience over returns. Geopolitical concerns, especially U.S. tariffs cited by 96% of reserve managers loom large for Uganda, whose USD 1.2 billion gold and coffee exports face trade risks. Over 80% of respondents now rank geopolitics among their top three investment drivers, surpassing inflation or interest rates. The Bank of Uganda, historically reliant on the dollar, is adapting to this reality.

The dollar, while still expected to dominate global reserves for a decade per 80% of central banks, is the only major currency seeing reduced demand. Meanwhile, 16% of central banks plan to increase euro holdings, and emerging markets like Uganda are eyeing the renminbi, reflecting trade ties with China, evident in projects like the Kampala-Jinja Expressway. Yet, gold is the standout 32% of central banks, including Uganda, aim to boost gold reserves soon. This echoes Uganda’s 2024 move to purchase domestic gold to bolster foreign exchange reserves, reducing reliance on volatile assets.

Gold’s appeal is rooted in Uganda’s economic fabric. Gold exports, a lifeline for communities in Mubende and Moroto, align with the Bank of Uganda’s strategy to hedge against risks like U.S. trade policies or regional instability in South Sudan. Deputy Governor Michael Atingi-Ego emphasized this in a 2024 BBC interview, noting gold’s role in stabilizing reserves. The GPI underscores this caution, with central banks and funds like Uganda’s NSSF shying away from riskier assets like equities, focusing instead on stability.

Uganda’s gold strategy leverages its role as East Africa’s refining hub, with 2023 exports underscoring its economic weight. The GPI, covering 90 institutions managing USD 7 trillion, shows diversification is about survival. Uganda’s inclusion in OMFIF’s new Global Public Investor Working Group, launching at the October 2025 IMF-World Bank Meetings, amplifies its voice in shaping global reserve strategies.

While the dollar remains a safe asset for 80% of central banks, Uganda’s pivot to gold reflects a broader trend. The GPI notes reduced appetite for U.S. assets among public funds, with Uganda’s NSSF mirroring this caution. As global uncertainties trade wars, geopolitical tensions persist, the Bank of Uganda is fortifying its reserves with gold, a nod to both economic pragmatism and cultural heritage. From Karamoja’s mines to Kampala’s vaults, Uganda is anchoring its future in gold, ready to weather the global storm.

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