Egypt and the African Export–Import Bank (Afreximbank) have taken a significant step toward reshaping Africa’s gold economy, signing a memorandum of understanding (MoU) to explore the creation of a pan-African Gold Bank. The initiative aims to formalise gold value chains, strengthen central bank reserves and reduce the continent’s dependence on foreign refining and trading hubs.

The agreement was signed at the Central Bank of Egypt’s headquarters by CBE Governor Hassan Abdalla and Afreximbank President and Chairman George Elombi. Under the MoU, the two institutions will jointly commission a feasibility study to assess the technical, commercial and regulatory requirements for establishing an integrated gold banking ecosystem in a designated free zone in Egypt, with participation from African countries.

The proposed framework would include an internationally accredited gold refinery, secure vaulting facilities and a range of financial, trading and settlement services—effectively creating a continent-based infrastructure for refining, storing, financing and trading African gold.

Officials said the initiative aligns with Egypt’s strategy to deepen economic integration with African states, while advancing Afreximbank’s mandate to promote value addition and strategic mineral processing across the continent.

Rethinking Africa’s dependence on global gold markets

Beyond its operational ambitions, the proposed Gold Bank carries broader monetary implications. According to Dr. Esmat Kamel, associate professor of economics at MSA University and director of the Global Trade Matters think tank, the initiative could help reduce Africa’s structural dependence on international gold markets dominated by Europe and the United States, as well as its exposure to the dollar-centric global monetary system.

“Nearly 60% of global wealth and reserves remain dollar-denominated,” Kamel said. “With rising US debt thresholds and growing debate around the long-term sustainability of dollar dominance, many forecasts now point to potential systemic risks. If global gold reserves and the international monetary system remain excessively pegged to the dollar, any shock could reverberate across currencies worldwide.”

While many countries have diversified their reserve holdings to hedge against dollar volatility, Kamel noted that structural dependence remains high.

“This initiative supports deeper reserve diversification, improved foreign-exchange management and stronger investment and trade flows between African economies,” she said, adding that governance and adoption mechanisms will be critical to its success.

Implications for Egypt’s external position

From a macroeconomic and financial-stability perspective, the project could be transformative for Egypt, according to Yousra Gamea, managing director of Vertex Financial Consulting.

“Instead of keeping gold only as a passive reserve, Egypt would be able to deploy it more actively in trade finance, liquidity support and gold-backed transactions,” Gamea said. “This reduces pressure on hard currency and gives the Central Bank greater flexibility in managing shocks.”

She added that the initiative could generate stable foreign-currency inflows through refining, storage, trading and financing services linked to African gold—revenues that support the balance of payments and reduce reliance on volatile capital flows.

Rebuilding Africa’s gold value chain

Africa currently exports the majority of its gold in raw or semi-processed form, forfeiting much of the value captured through refining, certification, financing, trading and bullion services, which largely take place outside the continent.

Kamel said the absence of an integrated intra-African gold ecosystem has long constrained the sector’s developmental impact.

“Africa lacks sufficient local refining capacity, harmonised production standards and robust regulatory oversight,” she said. “This fragmentation increases smuggling, weakens the sector’s contribution to economic growth and, in some cases, keeps gold activity in the informal economy.”

The proposed Gold Bank, she argued, could fundamentally change this dynamic. With accredited refineries, regionally recognised assayers and certification systems aligned with international benchmarks such as LBMA compliance, Africa could reposition itself not only as a producer of raw gold but as a processor, certifier and financial intermediary.

Trade, industry and financing spillovers

The potential benefits extend beyond mining. Gold also plays a role as an industrial input, and localising refining and processing could strengthen downstream industries.

“If refining and processing are carried out within Africa instead of being outsourced to Europe, value chains become shorter, costs fall and downstream industries gain momentum,” Kamel said.

She added that the initiative aligns with the gravity theory of trade, which predicts stronger trade flows between geographically closer partners when barriers are reduced. Standardised refinery services and certification across Africa could strengthen both direct and indirect trade, particularly as tariff, non-tariff and procedural barriers are lowered.

The financial dimension is also significant. Kamel pointed to Afreximbank’s experience with structured commodity finance, including its $3 billion revolving facility for intra-African petroleum trade.

“A gold-backed ecosystem can replicate this success by facilitating cross-border settlement, liquidity provision and access to trade finance,” she said.

Regulatory coordination: The biggest test

Despite its promise, experts caution that regulatory coordination will be the initiative’s most difficult challenge.

“Harmonising mining rules, refinery standards, taxation regimes, royalty structures and central bank mandates across Africa is not easy,” Kamel said. She noted that continental frameworks such as the African Continental Free Trade Area (AfCFTA) could provide a legal backbone if they clearly define trade rules, ownership structures and institutional authority over gold reserves.

Market design will be equally critical. A functioning gold bank requires liquidity, continuous trading, narrow bid-ask spreads and robust risk-management frameworks—conditions that depend on deeper integration of African commodity markets and the dismantling of trade barriers.

Can Egypt become a regional gold hub?

Commenting on the agreement, CBE Governor Hassan Abdalla said the initiative could evolve into a fully fledged pan-African framework involving governments, central banks and market participants across the continent. Egypt’s potential role as a hub, he said, reflects growing confidence in its ability to host large-scale continental projects, subject to the outcome of the feasibility study and subsequent approvals.

“Egypt’s strategic location at the crossroads of Africa, the Middle East and Europe positions it as a natural centre for regional gold trade and financial innovation,” Abdalla said.

Afreximbank’s Elombi described the agreement as a turning point for Africa’s economic future.

“This signing may appear simple, yet it has tremendous economic consequences for our continent,” he said. “Africa’s gold must serve African people. This MoU creates an African Gold Bank that will fundamentally alter how we extract, refine, manage, value, store and trade our gold, with the primary aim of retaining value on the continent.”

He added that building Africa’s gold stock would enhance economic resilience, reduce vulnerability to external shocks, improve currency stability and convertibility, and create wealth within Africa.

A balanced outlook

Gamea agreed that Egypt is well-positioned to play a leading role, citing its strategic geography between Africa, Europe and the Gulf, existing logistics and refining capacity, and institutional credibility through its alignment with Afreximbank.

However, she stressed that policy support will be decisive, including expanded international-standard refining and vaulting facilities, clear regulations for gold-backed trade finance, and supportive tax and customs frameworks.

Kamel offered a more measured assessment.

“It is still too early to guarantee that Egypt can emerge as Africa’s definitive gold trading and refining centre,” she said. “The vision is strong, but the market architecture is still being built.”

She outlined key prerequisites: harmonised regulatory policies, gold-backed financial instruments, regionally accredited refineries and assayers, standardised certification, highly secure vaulting facilities, advanced digital settlement platforms and stable, predictable policy frameworks.

“Above all,” Kamel said, “Africa needs a complete market architecture based on traceability, compliance, transparency and trust. Without this foundation, no gold ecosystem can function at scale.”

Afreximbank and the CBE maintain a long-standing partnership, with Egypt serving as both the bank’s largest shareholder and host country—a relationship officials say provides a strong base for advancing this landmark continental initiative.