Namibia Ditches Offshore Model: Central Bank Now Buying Gold Directly from Local Miners

By: GOLD MINERS CLUB

WINDHOEK – In a strategic move to diversify its national balance sheet, the Bank of Namibia (BoN) has entered into a direct gold purchase agreement with a domestic mining company, marking the first time the central bank has sourced bullion locally to bolster its international reserves.

The deal, confirmed by central bank Governor Johannes! Gawaxab on Tuesday signals a significant shift in monetary policy as Namibia seeks to reduce its reliance on traditional fiat currencies and hedge against global economic volatility. While the central bank did not disclose the specific mining partner, citing commercial confidentiality, industry sources indicate that the agreement involves the regular supply of refined doré bars to be held as part of the country’s official reserve assets.

Aligning with Global Central Bank Trends:

The move aligns Namibia with a growing cohort of central banks—particularly in emerging markets—that have been aggressively accumulating gold over the past two years. According to the World Gold Council’s Central Bank Gold Reserves Survey published in June 2024, 29% of central banks intend to increase their gold holdings in the next 12 months, citing “strategic diversification” and “domestic gold purchases” as key drivers.

“Gold has historically served as a safe-haven asset. By increasing our gold holdings through local procurement, we are not only strengthening our reserves management but also supporting the domestic mining sector,” the Bank of Namibia said in a statement released on February 24, 2026.

Governor! Gawaxab elaborated on the rationale during a press briefing in the capital, noting that the Namibian dollar, which is pegged one-to-one with the South African rand, remains vulnerable to external shocks. “We are not moving toward a gold standard, but this is a diversification strategy,” he was quoted as saying by The Namibian. “We are adding a stable, tangible asset to the mix to ensure that our reserves remain resilient.”

Retaining Mineral Wealth:

Historically, Namibia has been a significant gold exporter, with most of its production shipped to refineries in South Africa or Europe before being sold on international markets. According to data from the Namibia Statistics Agency (NSA), gold exports accounted for approximately N$7.8 billion in 2024. However, until now, very little of that bullion was retained within the formal reserve assets of the central bank.

Industry analysts view the deal as a “closed-loop” strategy that maximizes local value retention. “This is a game-changer for the mining sector,” said Henning Groth, a senior analyst at Simonis Storm Securities, in a research note released on Wednesday. “By having the central bank as a domestic off-taker, the miner reduces logistical costs and currency exchange risks. It also provides the central bank with a direct hedge against rand depreciation.”

The agreement is also expected to support the government’s broader Growth at Home strategy, an economic policy aimed at increasing local beneficiation and retaining a greater portion of value from natural resources within Namibia’s borders.

Caution from the Central Bank:

Despite the positive reception, the central bank has signaled that this is a measured step rather than a radical overhaul of its reserves portfolio. According to the bank’s latest Financial Stability Report (Q4 2025), Namibia’s international reserves stood at N$58.3 billion as of December 2025, with gold historically constituting less than 1% of that total.

The Bank of Namibia emphasized that gold will complement, rather than replace, its substantial holdings of foreign currencies, Special Drawing Rights (SDRs) from the International Monetary Fund, and other liquid assets.

Economist Salomo Hei, executive director of the Institute for Public Policy Research (IPPR), told Bloomberg that the deal reflects a broader trend of African central banks looking inward to secure their financial futures. “We’ve seen the Bank of Ghana and the Central Bank of Nigeria initiate similar domestic purchase programs. Namibia is now catching up, but the key will be transparency regarding how these assets are valued and audited,” Hei said.

Looking Ahead:

As the global financial landscape continues to evolve, the Bank of Namibia’s decision to invest in locally sourced gold represents a tangible shift towards economic sovereignty. The central bank confirmed that it is exploring long-term agreements with other local producers, pending the success of the initial pilot phase.

“This is a prudent step,” the BoN’s statement concluded. “It ensures that the wealth extracted from Namibian soil contributes directly to the stability of the Namibian dollar.”

By: GOLD MINERS CLUB