Africa Rich in Gold but Profits Flow Overseas: Governments Seek to Reclaim Control

Johannesburg, South Africa – When gold in Africa is mentioned, many think of Mansa Musa, the 14th-century emperor of the Mali Empire. He is described as the richest person in history, thanks to his empire’s vast gold wealth. Yet centuries later, Africa’s relationship with gold remains paradoxical.

The continent holds some of the world’s richest gold deposits. According to the United Nations Environment Programme (UNEP), Africa accounts for about 40% of global gold reserves. Still, Africa sits at the bottom of the global value chain. Gold mined from the continent is largely exported raw to Britain for refining, trading, and pricing. As a result, the most lucrative stages occur overseas.

“Africa’s position reflects structural limitations, including limited refining capacity, capital bottlenecks, and historical trade patterns that prioritize raw gold exports, allowing foreign markets to capture the highest margins from refining and trading,” said Kate Collett, an analyst at Africa Practice.

African governments are increasingly seeking not just to mine more gold but to retain greater control over this resource. Gold is being viewed as a strategic reserve asset to bolster national reserves, mitigate external risks, and enhance economic sovereignty.

A Shift in Global Reserves

Gold has emerged as a strategic reserve asset amid a fragmenting global economy. Central banks worldwide, especially in emerging economies like China, Russia, India, and Turkey, have increased gold purchases to diversify reserves and reduce reliance on external financial systems, according to the World Gold Council.

African countries are joining this trend. Ghana, one of Africa’s top gold producers, has increased the share of domestic gold purchased by its central bank under a domestic gold accumulation program. Nigeria is pursuing a reserve diversification strategy that includes boosting gold reserves. Tanzania requires about 20% of gold output from mining companies and traders to be sold to the central bank under a reserve-building framework. Guinea has tightened licensing and export controls in the mining sector.

According to Thea Fourie, head of Middle East and Africa analysis at S&P Global Market Intelligence, rising gold prices have reinforced these changes. “This trend aligns with a broader geopolitical shift toward de-dollarization … including developing alternative payment systems and increasing use of local currencies in trade,” she said.

Capturing More of the Value Chain

Many African governments are trying to retain more value from domestic production by tightening mining oversight and reshaping how gold travels from extraction to export. Ghana is expanding its central bank gold purchase program. Tanzania has tightened regulatory controls tied to domestic sales and reserve-building requirements. Guinea has revoked underperforming mining licenses and restricted raw gold exports to encourage domestic refining. Namibia continues to restrict raw mineral exports.

Artisanal mining, often operating outside the formal system, is gradually being brought into the formal gold economy. Governments are seeking to formalize production, reduce smuggling, and boost tax and export revenues. However, integration remains uneven as many small-scale miners lack access to finance, markets, and technical support.

Resource Nationalism in the Sahel

In the Sahel region, military-led governments in Mali and Burkina Faso have intensified state control over mining assets, framing reforms as part of efforts to reduce economic dependence on former colonial partners. Mali’s President Assimi Goita has overseen a restructuring of the mining sector, expanding the state role and promoting domestic processing capacity, with Russia emerging as a key partner. Burkina Faso has increased state participation in mining and seeks to expand national gold reserves. Both countries, along with Niger, have discussed plans for deeper economic and monetary cooperation, though these remain in development.

Nevertheless, most large mines in the region are still operated by foreign companies due to limited domestic technical capacity. According to Fourie, this shift reflects a broader wave of resource nationalism driven by fiscal pressures and security challenges. “These governments have also tightened ties with non-Western partners, reshaping long-standing trade and diplomatic relationships,” she said. However, analysts warn that excessive state control could deter investors if regulatory frameworks are unclear or inconsistently enforced.

A Long Road to Control

Despite growing policy momentum, full control of the gold value chain remains distant. Moving from extraction to refining and pricing within African economies requires sustained investment in infrastructure, skills, and industrial capacity. Beverly Ochieng, senior analyst at Control Risks, stated, “When measures are introduced without transparency or stakeholder engagement, investor confidence begins to erode.” Some governments have balanced tighter control with investor confidence by maintaining clearer consultation processes.

For now, most of the value from African gold still flows overseas. “The experiment with state-owned mining operators will be noteworthy … whether they can meet international standards, sell gold, and price it. And ultimately, whether this government is stable enough to pursue the process,” Ochieng said. Yet many analysts believe the trend is set. “In the long term, I think we are seeing more African governments taking steps to ensure the entire value chain is domestic … Possibly in a few decades, we might see an OPEC-like gold organization from African countries emerge,” Ochieng concluded.