Kenya’s gold reserves are gaining renewed attention as the Central Bank of Kenya (CBK) shifts from a conservative, dollar-heavy reserve strategy to actively building its holdings in gold. The move comes amid heightened global economic volatility, surging inflation, growing concern over the stability of the Kenyan Shilling, and recently the escalating Iran-Israel/USA conflict.
Historically, Kenya’s official gold holdings have been minimal. As of early 2025, the country held just 0.02 tonnes, equivalent to 20 kilograms or 600 ounces, valued between Sh169 million and Sh238 million. This follows the 1998 divestment of most of the nation’s gold reserves, part of a broader restructuring of foreign exchange assets. Despite the small physical quantity, global price surges pushed the value of Kenya’s existing gold up more than 40% in the financial year ending June 2025.
The CBK is now moving from passive ownership to active management of gold as a financial instrument. The central bank views the asset not merely as a store of value, but as a policy tool to mitigate risks from global market shocks, currency volatility, and geopolitical events.
The CBK’s strategy aligns with broader trends in emerging markets, including Ghana and Tanzania, where central banks have steadily increased gold reserves. While gold still represents less than 1% of Kenya’s $11–12 billion foreign exchange portfolio, officials view expansion as essential to stabilizing the Shilling, safeguarding the economy, and reinforcing investor confidence.
Governor Dr. Kamau Thugge has confirmed that the bank is assessing both domestic production and secure international storage options, positioning Kenya to gradually catch up with regional peers while navigating heightened global and geopolitical volatility.
Acquisition and Sourcing
The CBK primarily acquires gold through its Domestic Gold Purchase Program, a strategy designed to formalize Kenya’s artisanal and small-scale mining sector (ASGM). Licensed miners and cooperatives approved by the Ministry of Mining sell gold directly to the central bank. Raw gold is refined domestically, including at the Kakamega gold refinery, to meet international purity standards of 99.9% (24k) before entering the reserves.
Under the Central Bank of Kenya Act, the CBK also retains the authority to buy, sell, or import gold from international institutions, including foreign central banks and the Bank of England. This dual approach allows Kenya to develop domestic production while maintaining access to international liquidity.
Valuation and Policy Use
The value of the Kenya gold reserves is closely tied to global market conditions. Prices on platforms such as the London Bullion Market Association determine the dollar value, which is then converted into Kenyan shillings for accounting purposes. Even without acquiring additional gold, the CBK’s balance sheet reflects fluctuations in market prices. In 2025, Kenya’s gold holdings increased in value by 40.8% purely due to market appreciation.
Gold now serves multiple policy objectives. It helps diversify reserves away from the US dollar, provides liquidity during periods of exchange-rate stress, acts as a long-term hedge against inflation and currency depreciation, and signals financial prudence to international investors.
Iran-Israel/USA Conflict
The Iran-Israel/USA conflict has added new dimensions to gold’s strategic importance. Kenya’s fuel imports are highly exposed to global oil price shocks, which surged 3% to 5% following the escalation in the Strait of Hormuz. Gold, in contrast, appreciated to over $5,400 an ounce in March 2026, boosting the value of existing CBK holdings and partially offsetting the higher cost of imports.
Gold also offers a safeguard against “safe-haven” capital flight. In early March 2026, foreign investors withdrew Sh132 billion from the Nairobi Securities Exchange (NSE), moving funds to cash and gold in response to the Middle East geopolitical tensions. Maintaining gold reserves provides a neutral asset that retains value during investor exits, serving as a psychological anchor for the economy.
Gold further mitigates the risks of geopolitical “weaponization.” Following lessons from Russia, CBK officials recognize that dollar-denominated reserves can be frozen during international conflicts. Gold, as a sanction-proof asset with no counterparty risk, allows Kenya to preserve financial autonomy even if global payment systems are disrupted.
The conflict has also driven local investment activity. Gold Exchange-Traded Funds (ETFs) on the NSE have surged, with the Absa New Gold ETF reaching record highs of Sh6,555–Sh6,800 in early 2026. This growing demand came as Kenyan investors sought protection from global market and war-related volatility.
East Africa Gold Reserves
Kenya’s gold reserves remain low compared with its neighbors. Tanzania has developed the most mature program, with gold comprising over 30% of its foreign exchange holdings. Uganda plans to purchase 100 kilograms between March and June 2026 to hedge against global market risks. While Kenya has the region’s largest economy, its gold holdings are the smallest among the “Big Three,” and high global prices above $5,000 per ounce make accumulation more expensive.
Jefferson Wachira is a writer at Africa Digest News, specializing in banking and finance trends, and their impact on African economies.