The initiative aims to boost Namibia’s national reserves, stabilize inflation, and reinforce the value of the Namibian dollar by accumulating gold as a key financial asset.
With a well-established mining industry and a stable political environment, Namibia is one of Africa’s leading gold producers, and the sector remains a vital contributor to its GDP.
The Namibia Economist reports that Bank of Namibia (BoN) Governor Johannes !Gawaxab confirmed the decision during a statutory engagement with President Dr. Netumbo Nandi-Ndaitwah last week.
According to the central bank, Namibia’s foreign reserves declined by 5.2% in the first quarter of 2025 to N$59.7 billion.
The move to include gold—targeting 3% of net foreign exchange reserves—aligns with a growing global trend among central banks.
Gold is increasingly seen as a strategic asset for hedging against inflation and strengthening economic resilience during times of financial stress.
According to the Bank of Namibia, the country’s gold earnings surged in the fourth quarter of 2024, rising by 20.1% year-on-year and 13.4% quarter-on-quarter to reach N$4.3 billion.
Despite this progress, Namibia, like many African countries, continues to face economic challenges, including inflation, currency depreciation, and exposure to volatile commodity prices.
The decision to adopt Ghana’s model is part of a broader economic diversification strategy aimed at improving long-term resilience and reducing dependency on foreign currencies, particularly the US dollar.
By strategically increasing its gold reserves, the Bank of Namibia hopes to strengthen its foreign exchange position and create a more stable foundation for future economic growth. This move reflects a growing trend among African nations seeking homegrown solutions to navigate global financial uncertainty.
Ghana’s gold purchase deal
Ghana, one of Africa’s leading gold producers, launched the Gold Purchase Programme in the early 2020s as a proactive measure to address the economic challenges posed by fluctuating commodity prices, inflationary pressures, and the volatility of the global financial system.
The programme, initiated by the Bank of Ghana (BoG), allows the central bank to purchase gold directly from domestic producers and incorporate it into the country’s foreign exchange reserves.
This move is seen as a direct response to global financial volatility, as well as a proactive step to enhance Namibia’s economic sovereignty and resilience.
By accumulating gold, the Bank of Namibia (BoN) aims to reduce its reliance on foreign currencies, particularly the US dollar, and bolster its foreign exchange reserves.
This will enable the country to maintain a more stable currency and provide a stronger foundation for economic growth in the years to come.
However, Ghana has halted its gold purchase program, further casting doubt on the efficacy of such strategies in stabilizing foreign reserves or shielding economies from external shocks. The move raises important questions about the practicality and long-term sustainability of using gold as a buffer in times of economic volatility, particularly for developing countries with limited fiscal space.
Ghana’s reversal may serve as a cautionary tale for other countries, including Namibia, that are looking to follow similar paths.
