Africa Finance in Brief: Gold Rally, Currency Gains and Banking Battles

Gold surged past $5,000 an ounce for the first time on Monday, extending a historic rally driven by geopolitical uncertainty, expectations of looser US monetary policy and sustained central-bank demand. Spot gold rose nearly 2 percent to $5,081 an ounce, after hitting an intraday high of $5,092, according to Reuters.

Bullion prices rose 64 percent last year and are already up more than 17 percent year-to-date, supported by strong safe-haven flows and record inflows into gold-backed exchange-traded funds.

The rally is set to boost revenues for Africa’s gold-producing economies, including Ghana and Uganda, where gold accounts for a significant share of export earnings and foreign exchange inflows.

Why it matters: Higher gold prices strengthen export revenues, improve current account positions, and provide fiscal breathing room for gold-dependent African economies at a time of tight global financial conditions.

The South African rand strengthened to its highest level against the US dollar in more than three years on Monday, buoyed by record gold prices, improved global risk appetite and renewed weakness in the dollar.

The currency touched 16.00 to the dollar for the first time since June 2022 and was trading around 16.01 later in the day. Since the start of the year, the rand has gained about three percent, tracking the surge in commodity prices.

As one of Africa’s largest gold producers, South Africa has benefited disproportionately from the rally, which has improved its terms of trade despite persistent domestic economic constraints.

Why it matters: A stronger rand helps ease imported inflation pressures and supports financial stability, though sustained gains will depend on domestic reforms and global risk sentiment.

Kenya has emerged as the focal point of Africa’s banking expansion race, as regional lenders seek growth outside increasingly competitive home markets.

South Africa’s Nedbank plans to acquire a 66 percent stake in NCBA Group, while Nigeria’s Zenith Bank has secured approval to acquire Paramount Bank. Access Holdings has already completed the acquisition of National Bank of Kenya, adding to its earlier purchase of Transnational Bank. Meanwhile, Dubai-based Soren Investment Company acquired Gulf African Bank, Kenya’s largest Islamic lender, last year.

The deals reflect Kenya’s appeal as East Africa’s financial hub, offering scale, regulatory depth and access to regional trade flows.

Why it matters: Kenya’s banking sector is becoming a continental gateway, intensifying competition, reshaping market structure and signalling a shift toward regional consolidation in African finance.

Zimbabwe’s annual inflation rate fell to 4.1 percent in January, marking its first return to single-digit inflation since 1997 after years of severe price instability.

Inflation dropped from 15 percent in December and from as high as 85.7 percent in April last year, according to central bank data. The slowdown places Zimbabwe alongside Ethiopia and Ghana, which have also recently tamed inflation after prolonged macroeconomic stress.

Authorities say sustained price stability is critical to plans to make the gold-backed Zimbabwe Gold (ZiG) currency the country’s sole legal tender by 2030.

Why it matters: A return to single-digit inflation is a key test of policy credibility and currency reform, with implications for investor confidence, household purchasing power and long-term macro stability.

Nigeria’s naira appreciated modestly across official and parallel markets as the country’s external reserves rose to an eight-year high of $46.01 billion.

At the Nigerian Foreign Exchange Market, the naira strengthened to N1,418.95 per dollar, while the parallel market rate improved slightly to N1,485. The last time reserves were at similar levels was in August 2018.

The reserve build-up reflects improved liquidity conditions and stronger foreign inflows.

Why it matters: Rising reserves enhance the central bank’s ability to manage volatility, support investor confidence and stabilise the currency amid ongoing economic reforms.

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Bunmi holds a degree in Economics from the University of Lagos and has over eight years of experience in content writing and journalism.

Her career spans roles as a financial and business journalist at BusinessDay Media and TechCabal, and as Head of Research at SBM Intelligence, an Africa-focused market intelligence and strategic consulting firm.

She also served as Editor at Finance in Africa, a subsidiary of Businessfront and is currently Assistant Editor, Finance (Africa), at BusinessDay.

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