Gold greatly contributes to state revenues and GDP in Africa, as the primary mineral commodity mined in several countries. The global increase in the ore’s prices could boost producers’ revenues, including those active in Africa.

Gold futures contracts for April reached $2,126 per ounce on Monday, the highest level since the contract was created in 1974. In recent months, many analysts, including those from the World Gold Council (WGC), predicted that gold prices should be higher than in 2023.

In 2023, the average price of gold stood at $1,940 per ounce, according to the WGCl, up 8% year-on-year. It could increase further this year, as observers anticipate the Federal Reserve's first interest rate cut since 2020. This could result in a 4% increase in the price of gold, according to the WGC. Investment bank J.P. Morgan, on the other hand, forecasts a gold price of $2,300 per ounce by mid-2024.

Among other factors contributing to the rise, Ole Hansen of Saxo Bank cites central bank gold purchases and sustained investor demand for gold-backed Exchange-Traded Funds. Some of these forecasts are being confirmed, as according to the World Gold Council, central banks added 39 tonnes of gold to global reserves in January. This is twice the net purchases from December 2023 and the eighth consecutive month of net purchases.

Many African countries depend more or less heavily on gold mining. In Mali and Burkina Faso, two important West African producers, gold contributed 22% and 19.25% of mining revenues in 2021, respectively. For these countries, higher gold prices could mean higher revenues, provided that production does not decline.

Emiliano Tossou