Ruto clears the way for CBK to buy gold locally, flags surge in demand

President William Ruto has signed into law legislation granting the Central Bank of Kenya (CBK) explicit legal authority to buy, sell, and hold gold and other precious metals, positioning the country as a regional gold hub.

This is after the President assented to the Central Bank of Kenya (Amendment) Bill, 2026.

Ruto said the new law “ushers in sweeping reforms aimed at strengthening the CBK's capacity to safeguard financial stability, improve banking oversight, and modernise the country's monetary policy framework."

He added that the amendment clarifies the CBK's legal authority to deal in gold and other precious metals as part of reserve management, a move expected to support Kenya's growing mining sector while aligning the country with international best practice. "This will support the growth of Kenya's mining sector and align Kenya with practices in Tanzania, Ghana, and South Africa," Dr Ruto said on his official X account on Monday.

The legislation comes as Kenya prepares to tap into one of its most significant mineral discoveries in decades. The Isulu-Bushiangala gold project in Kakamega County, licensed to Shanta Gold Mining Company, holds an estimated 1.2 million ounces of gold valued at approximately Sh680 billion, placing it among Kenya's most significant extractive investments. The project is expected to generate thousands of jobs and inject billions into the local economy.

Kenya's gold production eased slightly to 329.1 kilogrammes in 2025 but held a steady value of Sh3.3 billion, with the sector dominated by artisanal and small-scale mining while international companies continue to identify large-scale potential in western Kenya's geologically rich greenstone belts.

The amendment to Section 27 of the Central Bank of Kenya Act now reads: "The Bank may buy, sell, import, export, transfer, hold, refine, or otherwise deal in gold, gold coins and bullion, silver, platinum, any other precious metals or foreign exchange under such terms and conditions as it shall determine".

Silver and platinum are significantly cheaper than gold.

Gold was quoted at $4,558.50 (Sh593,000) per ounce while silver and platinum traded at $76.60 (Sh9,880) and $1,995.40 (Sh259,000) per ounce respectively. Both metals have been tied to booming industries such as green energy, electronics and automotives as key raw materials.

The value of gold held by the Central Bank of Kenya jumped at the fastest rate in over a decade to Sh309.71 million at the end of December last year, amid a rally in global prices. Gold holdings rose 63.9 per cent from Sh188.9 million held in December 2024.

The precious metal extended gains to a record $5,589.38 per troy ounce on January 28, 2026.

The CBK has been actively expanding its gold holdings to reduce reliance on the US dollar and hedge against currency volatility. Kenya announced plans to acquire additional gold in October 2025 as part of an effort to diversify its foreign-exchange holdings.

African central banks have been particularly active in the gold market. Tanzania's central bank has accumulated 27.5 metric tonnes of gold under a programme launched in September 2023, while Ghana now sources around one-third of its central bank reserves from domestically produced gold.

The amendments also establish a legal foundation for a Domestic Gold Purchase Programme, allowing the apex bank to diversify reserve assets while relying on licensed private refiners rather than engaging directly in commercial refining activities. Under the proposed programme, the CBK would buy locally mined gold using Kenya shillings and convert it into part of the country's official reserves.

Beyond the gold provisions, the new law introduces a distinct legal framework separating the CBK's routine monetary policy operations from Emergency Liquidity Assistance (ELA).

Under the amendment, ELA can only be extended to banks that meet strict conditions on solvency, viability, and systemic risk.

Ruto said the legislation also elevates financial system stability and sound banking regulation as secondary objectives of the Central Bank while retaining price stability as its primary mandate. Nominees for Deputy Governor positions will now be vetted and approved by the National Assembly before appointment, aligning their process with that of the Governor.

The Bill was sponsored by Kuria Kimani, MP and Chairperson of the Departmental Committee on Finance and National Planning.