A leading economist in the country has called the Bank of Namibia’s decision to commence gold accumulation as part of its foreign exchange reserve management strategy as “long-overdue”. The central bank last week announced the decision to include gold, targeting 3% of net foreign exchange reserves, saying it aligns with global central banking trends, given the precious metal’s strategic value in hedging against inflation and enhancing resilience during economic shocks.
Gold reserves refer to the quantity of gold held by a central bank or government as a financial asset. These reserves traditionally serve as a form of currency stabilisation and can provide security during times of economic uncertainty. Gold reserves usually play a crucial role in national economic stability, serving as a safeguard against currency fluctuations as well as against domestic, regional and global financial crises. Gold reserves are generally maintained by central banks and act as a stockpile of value, reflecting a country’s commitment to sound monetary policies. A system of gold reserves connects the value of a country’s currency to a fixed amount of gold, requiring nations to keep large gold reserves to support their money supply.
“I think it is long-overdue. We produce gold, but we do not have gold reserves. Gold is a safe asset. Irrespective of uncertainty and a tariff war, we should have gradually accumulated refined gold. I think we should also stockpile yellow cake,” commented economist, former Presidential advisor and former chief executive officer of the Development Bank of Namibia, John Steytler.
His comments come in the wake of increasing global economic and financial indecision exacerbated by US president Donald Trump’s tariff uncertainty.
Namibia’s gold production is primarily driven by two main mines, namely the Otjikoto Mine, operated by B2Gold, and the Navachab Mine, operated by QKR. The Otjikoto Mine, in particular, has significantly boosted Namibia’s gold output. In 2024, the Otjikoto Mine produced 198 142 ounces of gold, contributing to a total consolidated gold production of 804 778 ounces for B2Gold.
Meanwhile, the second-largest economy on the planet, China, increased its gold reserves in December last year. This means China’s foreign exchange reserves totalled US$3.2 trillion (about N$58.5 trillion) at the end of December 2024, official data showed Tuesday, staying above US$3.2 trillion for the 12th consecutive month.
In comparison, during the first quarter of 2025, Namibia’s foreign reserves declined by 5.2% quarter-on-quarter to N$59.7 billion. This brought Namibia’s import cover to an estimated 3.9 months, or 5.2 months when excluding oil and gas-related imports financed externally.
Furthermore, 2024 marked the third consecutive year of gold holdings’ expansion by China. This took China’s share of gold in foreign exchange reserves from 3.3% at the end of 2021 to 5.5% at the end of 2024, according to a financial media platform under the China News Service.
Meanwhile, countries with the highest amount of gold reserves are the United States of America, Germany, Italy, China and Switzerland.
Last week’s central bank meeting with President Netumbo Nandi-Ndaitwah included the governor of the Bank of Namibia, Johannes !Gawaxab, accompanied by deputy governors Leonie Dunn and Ebson Uanguta. The meeting formed part of the central bank’s annual statutory engagement. It also served as a platform to provide a comprehensive overview of recent economic developments, and highlighted the bank’s key strategic initiatives supporting economic transformation and inclusive growth.
At the meeting, the central bank governor noted that domestic inflation accelerated to 4.2% in March 2025, largely driven by increases in food, alcoholic beverages, transport and housing prices. Looking ahead, the Bank of Namibia revised average inflation forecasts for 2025 and 2026 upwards to 4.2 and 4.5%, respectively.