Multiple countries are on their way to establishing full control over their gold and foreign exchange reserves
The global crisis that has affected the entire world is compelling many countries to look for new ways to ensure their financial stability and independence. Record-high gold prices suggest a profitable direction to move in, and African countries understand this. However, because the West still mostly controls gold extraction in Africa, continent is forced to find a permanent solution to the colonial issue.
The problem of reserves
Due to growing geopolitical tensions, international reserves and gold reserves are becoming a key theme not only in developed countries, but also in developing ones. For Africa, the problem of foreign exchange reserves remains one of the most relevant issues.
Since Africa has problems with access to international financing markets (due to high interest rates on loans and bond yields), hard currency (i.e. the dollar and euro) plays a key role in ensuring imports. It is not a coincidence that the sufficiency of gold and foreign exchange reserves is measured in months of imports – i.e., the number of months of imports they could pay for.
For Africa, the issue of gold reserves is also relevant due to the unfolding debt crisis on the continent: Zambia defaulted in 2020, Ghana did so in 2022, and Ethiopia in 2024. Among other things, this was provoked by China’s sudden reduction in lending to African nations – new loans were taken to pay off previous ones.
https://www.rt.com/africa/603299-africa-west-gold-exchange-reserves/
Against this background, African countries have to look for new ways to ensure macroeconomic stability, such as reducing imports, increasing taxes, eliminating subsidies, increasing reserves and striving to fully control them.