In Summary
  • Tanzania and other gold producing countries are expected to stimulate their economies through the commodity, after the World Gold Council (WGC) announced the projected increased demand for the commodity in long term.

Dar es Salaam. Gold demand will increase in the long term, a global council has forecast.

The World Gold Council (WGC) head of market intelligence, Alistair Hewitt, was quoted yesterday by foreign media as saying the situation would boost earnings of African countries, which most have youngest population.

He explained that growing urbanisation would result in more large cities being built in Africa, which could potentially lay the foundations for increased incomes.

“In our analysis, these factors are strong drivers of gold demand. It is intuitive to think that when people have more money, they will start thinking about where and how to save.” Gold lends itself to being an extremely effective form of saving, he advances.

Moreover, Hewitt explained that large areas in Africa did not have traditional banks.

Instead, there is a rapid uptake of fintech – using mobile phones to manage bank accounts. The rapid development of mobile technology also enables people to buy gold for small amounts.

Such factors may support the growth of gold demand in Africa, he highlighted.

One such fintech solution is the fintech savings platform HelloGold, which announced its entering Africa with digital financial inclusion group Baobab as a partner last month.

The companies will jointly develop products for Baobab’s 800,000 clients in Burkina Faso, the Democratic Republic of Congo, Ivory Coast, Madagascar, Mali, Nigeria, Senegal, Tunisia and Zimbabwe.

The WGC’s ‘Outlook 2019’ report, released in January, indicates that the interplay between market risk and economic growth is expected to drive gold demand globally.

The report expects three trends – financial market instability, monetary policy and the US dollar, and structural economic reforms – to influence the gold price.