A quiet announcement with big implications
By Lot Ndamanomhata
When Bank of Namibia Deputy Governor Nicholas Mukasa told reporters last week that the central bank has not yet decided whether to push gold reserves beyond an initial 3% target, it may have sounded like a routine technical update.
It isn’t. Namibia is one of a growing list of countries from Poland to Ghana to China that have concluded a hard lesson of the last few years: cash reserves parked in someone else’s currency, in someone else’s banking system, are only as safe as that country’s foreign policy allows them to be. Gold, sitting in a vault, cannot be frozen by a foreign government or switched off by a payments network.
The Moment SWIFT Stopped Being Neutral
For decades, central banks treated foreign currency reserves mostly US dollars and euros, moved through the SWIFT messaging network as the safest possible asset. SWIFT was assumed to be plumbing: apolitical, mechanical, always available.
That assumption broke in 2022.
Within days of Russia’s invasion of Ukraine, Western governments froze the assets of Russia’s central bank held in their jurisdictions, and the EU moved to disconnect a number of Russian banks from SWIFT.
Roughly half of Russia’s approximately $640 billion in gold and foreign currency reserves was frozen almost overnight, with the bulk of the frozen funds sitting in Europe.
Money that Russia’s central bank believed it owned and controlled simply became inaccessible the moment a foreign government decided it should be.
Crucially, gold behaved differently. Because a large share of Russia’s gold was held domestically rather than in foreign vaults, it escaped the initial freeze.
Russia held roughly $130 billion in gold reserves that sanctions could not immediately touch. It took a further, separate G7 action weeks later to specifically restrict transactions involving Russia’s central bank gold, underlining that gold held on foreign soil is vulnerable too, but gold held at home is a different story entirely.
Reporting has since described how Russia used its gold stockpile to obtain hard currency and skirt sanctions altogether, moving bullion through intermediaries to import dollars and euros despite being locked out of the dollar-based SWIFT system.
The takeaway that finance ministries around the world absorbed was simple: a reserve asset denominated in someone else’s currency, sitting in someone else’s bank, is a liability the moment your interests diverge from theirs.
Gold, especially gold physically held inside your own borders, is not exposed to that risk in the same way. This is a lesson for all nations.
A Global Rebalancing Is Already Underway
Namibia is not moving in isolation. Central banks worldwide have been buying gold at a pace unseen in generations. Purchases topped 1,000 tonnes for three consecutive years, and 2022- the year of the Russia freeze – was the single largest year of net central bank gold buying since records began in 1950, more than double the annual average of the previous decade. Surveys of central bankers show the trend has no signs of stopping: the vast majority expect global gold reserves to keep rising, and most expect gold to represent a larger share of total reserves five years from now.
The scale of the shift is historic. For the first time since the mid-1990s, foreign central banks collectively now hold more gold than US Treasury debt in their reserves.
The dollar’s share of global reserves has fallen to its lowest level since the mid-1990s, down sharply from roughly 72% in the early 2000s. Analysts at major banks now describe the growing appetite for gold as the clearest expression of a broader move away from dependence on any single foreign currency.
What Other Countries Have Learned — and Gained
Poland offers perhaps the clearest case study in deliberate, sustained accumulation. Starting from just over 100 tonnes, Poland’s central bank set out in 2021 to more than double its holdings, hit that goal within two years, and kept going.
By late 2025 Poland’s gold reserves had climbed past 540 tonnes – making it a bigger gold holder than the European Central Bank – with a stated ambition of reaching 700 tonnes and roughly 30% of total reserves.
Governor Adam Glapiński has been unusually candid about the reasoning: gold carries no credit risk, cannot be devalued by another country’s policy decisions, and remains valuable “even when someone cuts off the power to the global financial system.”
He has also pointed to a less obvious benefit – reputational credibility. Heavy gold reserves, he argues, make Poland “a more credible country” with a stronger standing in international credit ratings and a more serious footing as a financial partner.
Ghana shows what gold diversification can do for a smaller, commodity-producing economy much closer to Namibia’s own profile.
Facing a currency collapse and dwindling dollar reserves in 2022, Ghana’s central bank launched a Domestic Gold Purchase Programme, buying gold directly from local small-scale miners using Ghanaian cedis rather than scarce foreign currency.
Reserves grew from under 9 tonnes in 2023 to more than 40 tonnes by late 2025. The impact showed up directly in the exchange rate: the cedi, which had traded as weak as roughly GHC 16.25 to the dollar in late 2024, strengthened to around GHC 10.34 by mid-2025 – a roughly 32% recovery – a turnaround officials linked directly to the reserve build-up.
Ghana went further still, exploring a “gold-for-oil” policy to pay for fuel imports directly in bullion rather than dollars, specifically to stop oil-import demand for dollars from dragging down the currency.
China, India, and Turkey have been the largest drivers of the broader emerging-market shift into gold since 2021, a pattern researchers link to reducing reliance on the dollar amid rising US debt levels and geopolitical friction, even where individual countries aren’t explicitly trying to abandon the dollar system altogether.
Elsewhere in Africa, Namibia is part of a wider regional pattern. Nigeria has launched its own domestic gold-buying programme and moved to repatriate gold held abroad, citing concerns about the stability of the US financial system.
Tanzania, Zambia, Madagascar, and others have started similar domestic purchase schemes, buying gold from local artisanal miners in local currency – a method that lets a central bank grow its reserves without spending down the hard currency it’s trying to protect in the first place.
Why This Matters Specifically for Namibia
Namibia’s current position illustrates exactly why this shift matters. As of July 2026, gold made up less than 1% of the country’s roughly N$58 billion in official reserve assets – about N$573.4 million, against N$53.74 billion held in foreign currency, split between securities and deposits.
That means Namibia’s reserve cushion is overwhelmingly composed of exactly the kind of foreign-currency, foreign-institution-held assets that proved vulnerable elsewhere.
Reaching the initial 3% target would mean growing gold holdings roughly threefold, from around 8,574 fine troy ounces to about 25,721 ounces – an additional 17,147 ounces, worth roughly N$1.17 billion at recent prices.
That is a meaningful but still modest step. Compared with Poland’s ambition of 30%, or Ghana’s gold share climbing to more than 40% of reserves at one point, Namibia’s 3% phase-one target is a conservative opening move rather than a wholesale restructuring of its reserves.
That conservatism has a sound logic. Gold pays no interest, its price can be volatile in the short term, and a central bank still needs liquid foreign currency on hand to defend the currency peg with the South African rand and to pay for imports day to day.
But the examples above suggest the direction of travel matters more than the starting percentage. Ghana shows that even a central bank starting from a very low base can use domestic gold purchases – bought with local currency from local mines, exactly as Bank of Namibia is already doing – to build reserves without draining scarce foreign exchange, while also supporting the local mining sector.
Poland shows that a clear, publicly stated target builds credibility with rating agencies and international investors over time. And Russia’s experience is the cautionary tale in the background of every one of these decisions: reserves you do not physically control are reserves you may not actually have when you need them most.
What Namibia Can Learn Going Forward
A few lessons stand out from these international experiences as Bank of Namibia weighs a second phase beyond the 3% target:
• Buy locally, pay locally. Ghana and several other African central banks buy gold from domestic miners using local currency, growing reserves without depleting foreign exchange. Namibia’s existing programme, sourcing gold from local mines in Namibia dollars, already follows this lower-risk model.
• Set a public, credible target and stick to it. Poland’s steady, telegraphed accumulation — from 100 tonnes to a stated 700-tonne goal – has itself become a signal of financial discipline to markets and rating agencies, independent of the gold price.
• Treat gold as insurance, not a bet on price. The central banks that have benefited most did not buy gold to speculate on price gains; they bought it because it cannot be frozen, sanctioned, or devalued by another country’s policy choices – a form of protection cash reserves cannot offer.
• Balance is still the goal. No country examined here has moved to hold most of its reserves in gold. Even Poland’s ambitious 30% target leaves the large majority of reserves in currency and securities. Namibia’s cautious, phased approach — assess phase one, then decide on phase two in early 2027 – fits this same pattern of measured diversification rather than abrupt overhaul.
The broader lesson from Moscow’s frozen billions, Warsaw’s growing vault, and Accra’s stabilized cedi is the same one Bank of Namibia now has the chance to apply deliberately: reserves are not just a number on a balance sheet – they are a question of who ultimately controls a country’s money. Gold, held at home, is one of the few reserve assets no foreign government can switch off.
*Lot Ndamanomhata is from Ekoka. This article reflects his views and writes entirely in his personal capacity.
