Gold exports from Tanzania have overtaken tourism as the country’s biggest foreign exchange earner.

The African country has seen the value of gold exports rocket from next to nothing to $2 billion in the last 10 years.

Despite this, the country’s finances are still not in good shape as one in three people live below the poverty line. Investors are keen to get their hands on Tanzania’s gold, which could boost the economy.

Ministry figures show that $2.92 billion was invested into large-scale gold mines over the past 13 years. Over the same period, seven gold-producing mines were paid a large sum of $210 million in royalties.

Gold is now the foreign exchange earner of choice for the country, with exports quadrupling in the last six years alone. Gold prices have reached repeatedly record highs and Tanzania now rivals Mali for the third spot in Africa, following South Africa and Ghana.

Speaking to the Financial Times, Sebastian Spio-Garbrah, Managing Director of DaMina Advisors, commented; “Tanzanians look at the gold price and think the country should get more out of it.”

Whilst this marks a positive move for both the country’s GDP and potential investors, the government is trying to cash in by introducing higher tax regulations. The 2010 Mining Act proposes raising royalties on gold production from 3 to 4 per cent.

“Almost all African countries are changing their mining laws and making them tighter: it’s nothing out of the ordinary”, continued Mr Spio-Garbrah.

Transferring money to Africa

If you are looking to invest in Africa, think carefully about how you will be transferring money to Africa. Foreign currency exchange rates quoted by banks are almost always worse than the exchange rates available through specialist currency dealers.

So if you are looking to send money overseas, to Africa for example – which you will inevitably have to do if you are looking to make a property investment – be sure to compare the market before you buy your overseas currency.