Kenya's informal gold sector produces roughly 300 kilograms of gold each month, generating an estimated 36 billion shillings in largely unregulated transactions per year — and the government currently captures almost none of it. President William Ruto is moving to change that with a blanket ban on unprocessed mineral exports and plans to anchor the formal trade with at least three new gold refineries.
According to Business Insider Africa, Ruto announced that exporting gold outside approved government channels will become illegal, and the policy will extend to every mineral mined in Kenya — not just gold. The three planned refineries will be sited in the western mining region of Kakamega and in the capital, Nairobi. The Central Bank of Kenya (CBK) will act as a priority buyer in a new domestic gold-purchasing programme, mirroring the institutional architecture that Ghana and Zimbabwe have already deployed.
The structural problem Kenya is trying to solve is stark: more than 90% of the country's gold output comes from artisanal and small-scale miners who operate outside formal royalty and licensing frameworks. The State Department for Mining estimates Kenya loses roughly 1.2 billion shillings in potential royalty revenue every year as a result. A formal purchasing channel anchored by the CBK would, in theory, funnel that volume through trackable, taxable transactions — though enforcement against thousands of dispersed artisanal operators will be the real test.
Ruto cited Ghana and Zimbabwe as the policy templates. Ghana's model is the more instructive case study: the country established a dedicated gold board in 2024 as the sole authorised buyer from small-scale miners. The results were rapid and measurable — Ghana's international reserves rose by $3.9 billion by the end of 2025, a figure that has since become the centrepiece argument for value-retention policies across the continent. Zimbabwe took a similar route, designating a central bank subsidiary as the sole gold buyer and layering on export restrictions to push refinement onshore.
Kenya is East Africa's largest economy and has historically been more of a transit corridor for regional gold than a processing hub. Much of the gold produced by small-scale miners in western Kenya — and smuggled in from neighbouring Democratic Republic of Congo, Uganda, and South Sudan — has flowed out informally through Nairobi or directly across borders. Formalising that pipeline through CBK purchases and licensed refineries would, if successful, transform Kenya from a pass-through into a value-adding node.
The commercial logic for the refineries is straightforward: processed gold commands a significantly higher price per unit than raw ore or doré bars, and refining locally means that margin stays in-country. Three refineries also creates competitive capacity — one dominant government-linked refiner risks the same rent-seeking dynamics the export ban is designed to prevent. Whether the refineries will be state-built, public-private, or open to private investors has not yet been specified in the public announcements reported by Nairametrics.
The policy lands in a charged moment for Kenya's extractive sector. Earlier this month, the government withdrew a century-old soda-ash concession from a unit of India's Tata Group following a dispute — a signal that Nairobi is willing to use its regulatory leverage with established players, not just artisanal operators. That backdrop will sharpen foreign investors' scrutiny of the terms on which the refineries and the CBK purchasing programme are structured.
For operators and investors, the immediate question is sequencing. An export ban announced ahead of functioning refinery capacity creates a bottleneck: miners who cannot legally export raw gold but have nowhere domestic to sell processed product will simply push more volume into informal channels or across porous borders. Ghana avoided this trap in part because its gold board was operational before enforcement intensified. Kenya will need the CBK purchasing window and at least one licensed refinery to be credibly open before the ban is strictly enforced — or risk accelerating the very informality it is trying to dismantle.
Why it matters: Ghana's $3.9 billion reserve gain from a structurally identical policy gives Kenya a concrete benchmark, but that outcome took a functioning institutional buyer and years of miner registration. Kenya's 1.2-billion-shilling royalty gap is real money — but capturing it depends entirely on whether the refineries and CBK programme are operational before the export ban bites.