Ouagadougou: Soaring gold prices have sent African nations that produce the precious metal scrambling to capitalize on the surge. But can they adjust quickly enough?

According to Deutsche Welle, the value of gold grew by 65% in 2025 and breached $5,580 (£4,705) per ounce (roughly 31 grams) last week before declining. "What we've been seeing for months now simply shows that uncertainty in global markets has increased," Frankfurt-based online broker Salah-Eddine Bouhmidi told DW. "As a result, investors are turning to gold as a safe haven."

Thu Lan Nguyen, head of FX and Commodity Research at Germany's Commerzbank, explained that the "erratic policy approach" from the United States was a driver of the high gold price. "There are also significant fiscal risks due to the expansionary fiscal policy in the US, quite apart from the foreign-policy issues we're dealing with at the moment," she added.

Africa's main gold producers are seeking to profit from the rise in gold prices. Burkina Faso, for instance, reported a record 94-tonne gold output in 2025, an increase of over 30 tonnes compared to 2024 figures. Marvellous Ngundu, a researcher at the South Africa-based Institute of Security Studies (ISS), noted that Africa stands to benefit from "export earnings, fiscal revenues, and also an increase in the foreign currency inflows."

Ngundu highlighted that Africa produces over a quarter of the global gold output, more than any other continent. There is a caveat, though: "If, and only if, the leakages or the illicit financial flows associated with gold are controlled." Ghana, Africa's top gold producer, is changing its mining laws to capture a bigger share of gold revenues. Officials there say favorable tax and royalty terms leave the state with a limited stake.

Foreign mining companies operating in Ghana, including Newmont, AngloGold Ashanti, and Gold Fields, have expressed concerns about the proposed overhaul. Ghana's terms for foreign mining companies are known as stability agreements, which determine royalty rates for five to 15 years in exchange for investments of about $300 million to $500 million in mine constructions and expansions. Isaac Tandoh, acting CEO of the Minerals Commission, told Reuters news agency that "renewal is conditional, not automatic."

Elsewhere, Mali, the Democratic Republic of Congo, and Tanzania have also tightened mining laws to increase state control over critical minerals, including cobalt and coltan. Aside from Western backers, China and Russia have invested in gold mining, including in the Sahel countries.

Last year, Burkina Faso granted Russian mining giant Norgold a lease to develop the Bissa-Bouly mine, about 85 kilometers (53 miles) north of the capital, Ouagadougou. For analyst Ngundu, the surge in gold price, while welcome for Africa's miners, presents a double-edged sword for governments. "This gold windfall can fuel currency on overvaluation and crowd out other exports unless managed. You'll see that at the end of this quarter, Africa's exports will be high, especially for those who export gold," he told DW.

Even though Africa produces more gold than any other continent, it holds just 2% of gold reserves, according to Ngundu: "Gold is a currency on its own. It determines the monetary autonomy of the country. Gold is being sold by these [producing] countries, but the problem is that it's being sold to other countries in raw form."

For comparison, the United States has 8,133 tonnes in gold reserves, followed by Germany, Italy, and France. The highest-ranked African nation is Algeria, with 174 tonnes. South Africa, which has over a century of gold mining history, has just 125 tonnes.

Not only is gold leaving the continent, but it is also doing so cheaply, Ngundu said. "It's being sold to other countries in raw form. It then passes the value to other countries that buy it for refining purposes and keep it as reserves," he said.

Ngundu suggested building gold-refining plants on the continent and controlling "illicit leakages" would significantly help African governments benefit from their gold wealth. Ghana, like other African nations, has hemorrhaged mining profits due to illegal or unregulated mining. The skyrocketing gold price has also turbocharged demand in illicit mining, which in turn fuels instability in local communities, such as in the Sahel.

While the civil war has brought Sudan's economy to its knees, the Sudanese Mineral Resources Company (SMRC) announced a "five-year high" in production of 70 tonnes of gold in 2025. However, analysts and officials say most of the gold is smuggled out of Sudan before reaching the United Arab Emirates, the world's second-largest gold exporter.