What happened

President William Ruto announced that the Central Bank of Kenya (CBK) will receive priority when buying gold that is mined and processed within Kenya. The statement was made during a televised interview on NTV Kenya, where Ruto stressed the need to support local miners and add value to the country’s mineral resources. He said the move is intended to create a stable market for Kenyan gold and to encourage investment in the sector. By giving the CBK first access, the government hopes to anchor gold prices locally and reduce reliance on foreign buyers.

Context and background

Kenya’s gold mining industry has historically been small compared with its neighbours such as Tanzania and South Africa. Most gold extraction occurs in the Rift Valley and parts of the western highlands, where artisanal miners work alongside a few licensed companies. The sector has faced challenges including limited financing, inadequate processing facilities, and fluctuating global prices. In recent years the government has introduced policies to formalise artisanal mining and to encourage local processing, aiming to capture more of the value chain within Kenya.

The Central Bank of Kenya, traditionally responsible for monetary policy and foreign exchange management, has occasionally intervened in commodity markets to stabilise prices. Its involvement in gold purchases is not new; the CBK has previously bought gold as part of its foreign reserves strategy. However, giving the bank explicit priority over private buyers marks a shift toward a more coordinated approach between the central bank and the mining sector. Ruto’s announcement aligns with the broader “Made in Kenya” agenda that seeks to promote locally sourced raw materials.

President Ruto’s remarks come at a time when the Kenyan government is reviewing its mining code to tighten licensing and improve revenue collection. The Ministry of Mining, led by Minister Najib Balala, has been working with the CBK to develop a transparent pricing mechanism for gold. International partners, including the World Bank, have offered technical assistance to strengthen regulatory frameworks. The priority purchase policy is expected to be formalised through a memorandum of understanding between the CBK and the Ministry of Mining later this year.

Compared with what is normal

Historically, gold sales in Kenya have been dominated by private traders who export the metal to international markets, often at prices set by foreign exchanges. The CBK’s direct involvement has typically been limited to occasional purchases for reserve diversification, not as a standing priority buyer. By contrast, countries like South Africa and Ghana have central banks that regularly buy gold to support domestic pricing and reserve accumulation. In Kenya, the new policy represents a departure from a largely market‑driven approach to a more interventionist stance.

• Previous years saw private dealers handling roughly 80 % of gold sales, with the CBK accounting for a small fraction.
• The new priority system could shift that balance, potentially increasing the CBK’s share to 30‑40 % over the next few years.
• Gold production in Kenya remains modest, estimated at a few tonnes annually, so the impact will be gradual rather than immediate.

Why it matters

For Kenyan SMEs operating in the mining value chain, the policy promises a more predictable buyer and potentially better prices for locally processed gold. Artisanal miners, who often struggle to find reliable markets, may see higher income stability if the CBK offers regular purchase windows. The move also signals to foreign investors that the government is serious about developing a transparent, domestically anchored gold market, which could attract new capital for processing plants and equipment. On a macro level, increasing the CBK’s gold holdings can diversify Kenya’s foreign reserves, providing a hedge against currency volatility.

Practical steps

• Register your mining or processing operation with the Ministry of Mining to be eligible for CBK purchase programmes.
• Maintain accurate records of gold production and quality certificates to meet CBK’s procurement criteria.
• Engage with local gold traders and CBK liaison officers to stay informed about upcoming purchase windows and pricing formulas.
• Consider partnering with certified assayers to ensure your gold meets the required purity standards for central bank acceptance.
• Review your cash‑flow forecasts to incorporate potential revenue from CBK purchases, adjusting budgeting and tax planning accordingly.

Financial Management & Analysis services at Beavoren Ventures can help your business navigate the new CBK purchase framework, optimise cash flow, and ensure compliance with emerging reporting requirements.

Talk to our team at Beavoren Ventures - info@beavorenventures.co.ke - to set up your systems correctly.

Disclaimer: This article is informational and does not constitute formal tax, audit or legal advice. For guidance specific to your circumstances, please contact Beavoren Ventures.