The price of gold has reached a record high of US $1,944.71. This is unarguably a status that is a product of the characteristics that have long made the metal useful in finance. Furthermore, the new price is reportedly well above its previous record of US $1,921.18 per ounce in 2011.
This is good news for a country like Tanzania where gold is the leading foreign exchange earner. Further, the metal exports have since overtaken that of tourism which has been hit by COVID-19. According to the monthly economic review from the Bank of Tanzana, gold exports increased by 46.8% to US $2.5 ni the year to May while tourism earnings slowed from US $2.5Bn-2.3Bn in the same period. The increase in gold exports was attributed to increase in both production volume and price.
According to the central bank reports, gold sold at US $1,531.37 per troy ounce in May, up from US $1,257.35 recorded in similar month last year. Prospects are better following the increase of prices in the world market. Commenting on the development, the commissioner for minerals Mr. Zephania Maduhu said since Tanzania is also part and parcel of the trend in the global prices, the price increase will boost the country’s revenues.
Mining is one of the leading sectors in Tanzania, with the value of mineral exports increasing tremendously each year. In 2011 the value of mineral exports reached $2.1 billion, more than 95 percent of which came from six gold mines.
The mining sector contributes approximately 3.0% to annual GDP. Tanzania has the ambition to make the mining industry account for 10% or more of GDP by 2025. In the last decade, the country has witnessed growth in mining sector with reputable mining companies e.g. Barrick Gold, Ashanti Anglo-Gold, and Resolute investing in large-scale mines.
