Government has defended the Bank of Uganda’s (BOU) proposal to support the local gold market through securing purchases from native miners.

The Minister of State for International Relations, Henry Okello Oryem, said that this move is intended to shield Uganda from threats from the United States in case the nation unceremoniously freezes Uganda’s gold reserves.

Oryem made the remarks while appearing before Parliament’s Foreign Affairs Committee on January 14, 2025, to present the 2025/26 Budget Framework Paper.

“We are now in the process of studying, and a paper is being developed for the Bank of Uganda to start procuring gold so that we have gold reserves in this country and not only gold reserves abroad,” Oryem Said.

“We have about US$4 million of foreign reserves vis-à-vis our GDP. We stand the risk of the United States imposing sanctions and freezing all that money, and we are finished as a country,” he added.

According to him, this strategy not only secures Uganda’s gold assets but also supports local farmers and contributes to the national economy by enhancing domestic gold production.

Oryem emphasized that the initiative to purchase gold locally was a protective measure against the risk of U.S. sanctions, ensuring that Uganda can maintain control over its resources.

Oryem revealed that Uganda was obliged to join the BRICS due to the changes in world order where the United States & European Union have been unilaterally imposing sanctions on nations.

“The United States and European Union, whenever they impose sanctions, expect all those other countries to make sure they abide by those sanctions, and if you don’t, you face penalties or even they sanction you,” Oryem said.

Bank of Uganda, in its state of the economy report for June 2024, announced that it had started buying gold from the local market to beef up its foreign reserves and, in consultation with relevant key stakeholders, has initiated a Domestic Gold Purchase Program with the objectives of building the country’s foreign reserves and minimizing risks on reserves investments.

In a presentation to Parliament’s Committee of Commissions, Statutory Authorities, and State Enterprises (COSASE), the Bank of Uganda outlined the guidelines, which emphasize direct sourcing from artisanal, small, medium, and large-scale miners.

The approach aims to ensure traceability and authenticity, avoiding the inclusion of gold from other nations. A pre-qualification process will also be instituted for gold suppliers and refineries to meet quality and purity standards.