Madagascar Central Bank Launches Gold Buying Network Across Four Regions

Madagascar’s central bank is building a four-region gold collection network, targeting Ambilobe and Maevatanana in the north, Miandrivazo in the west, and Mananjary in the southeast. These collection points form the operational backbone of a formalized procurement system designed to bring structure to one of the country’s most sprawling informal industries.

The bank currently holds approximately one tonne of gold in its reserves and intends to expand that stockpile substantially. The goal is specific: strengthen and diversify foreign exchange reserves to stabilize the ariary, which has experienced significant volatility. Accumulating gold serves both a reserve-building function and a currency-management one.

Additional reference context is available at https://fr.news.yahoo.com/madagascar-banque-centrale-annonce-l-212011765.html.

The collection network is not simply a purchasing mechanism. The central bank’s stated objectives include establishing traceability for gold moving through formal channels, enforcing quality control standards, and reshaping working conditions within the artisanal mining sector. A central operational requirement is the elimination of mercury use in small-scale processing, a practice that poses severe environmental and health risks to workers and surrounding communities.

The sector encompasses roughly 600,000 workers, most operating outside regulatory oversight. That scale makes formalization both urgent and logistically demanding. The bank must establish functional procurement infrastructure across four geographically dispersed regions while simultaneously building trust among miners accustomed to informal arrangements.

What makes the challenge acute is the numbers. Last year, only 13 kilograms of gold were sold through the official export window, the country’s legal commerce platform. By contrast, the Ministry of Mines estimated in 2024 that approximately one tonne of gold was leaving Madagascar clandestinely each month. That gap, between 13 kilograms declared and roughly a tonne smuggled each month, defines the scale of the leakage problem the collection network is meant to address.

Contraband exports drain the country of valuable resources without generating tax revenue or foreign exchange benefits for the state. The smuggling operation is extraordinarily profitable for those running it, which means the central bank’s collection points must compete not just on convenience but on price and reliability.

Meanwhile, the formalization effort reflects a supply-side logic: create accessible, legitimate pathways for miners to sell their gold, and the incentive to bypass official channels weakens. Whether that logic holds in practice depends on execution. Competitive pricing, consistent operations, and genuine accessibility across all four regions are not guaranteed outcomes.

As reported by Yahoo Actualités, the central bank’s strategy acknowledges that the scale of informal mining and the profitability of contraband create powerful incentives to stay outside formal systems. Overcoming those incentives requires the collection infrastructure to actually work, reliably and attractively, from the day it opens.

The open question is whether sustained operational commitment follows the announcement. Building four regional collection points is one thing. Keeping them competitive, trusted, and functional enough to shift the behavior of 600,000 workers and displace entrenched smuggling networks is another matter entirely.