NAIROBI, Kenya — The Central Bank of Kenya (CBK) is facing growing scrutiny following reports that it has entered talks with the Bank of England (BoE) over a plan to store part of Kenya’s planned gold reserves in London.
In an open letter to CBK Governor Kamau Thugge, lawyer Abdulhakim Dahir demanded the immediate suspension of the negotiations, citing concerns over transparency, national sovereignty, and potential financial and geopolitical risks.
Dahir outlined five key demands, including a public disclosure of the draft storage agreement, a comprehensive cost-benefit analysis, and the development of a domestic gold reserve facility.
He also called for the involvement of Parliamentary committees and national dialogue before any formal commitment is made.
“Should Kenya ever find itself in a geopolitical dispute or subjected to international sanctions, our gold could be frozen or confiscated, leaving our economy vulnerable with little to no legal recourse,” Dahir warned.
The concerns follow remarks by Governor Thugge last week, confirming that the CBK had held discussions with the BoE and other international banks on potential bullion storage options as part of efforts to diversify the country’s foreign reserves.
“We’ve talked to the Bank of England and other banks to see how we go about it, where it will be stored, those kinds of things,” Thugge said.
Thugge clarified that the move was not meant to shift away from the US dollar, but rather to broaden Kenya’s reserve portfolio, which currently stands at $11 billion (Sh1.4 trillion). He did not, however, disclose the amount of gold Kenya intends to purchase or store abroad.
Gold prices have more than doubled in the past two years, reaching over $4,200 (Sh542,640) an ounce, driven by rising global debt, investor caution, and expectations of U.S. Federal Reserve rate cuts. The rally has made gold an increasingly attractive hedge for central banks worldwide.
However, Dahir argued that outsourcing gold storage would compromise Kenya’s economic independence and expose the nation to “weaponised finance” — a situation where global powers could use financial systems or assets to exert political pressure.
“This creates a dangerous dependency. In a time of international crisis or economic emergency, our ability to access and leverage our own reserves could be subject to restrictions, conditions, or delays imposed by the UK government acting under its own laws or in accordance with directives from NATO,” he noted.
The lawyer urged the CBK to invest in a domestic gold depository, citing examples from countries such as Russia, China, and India, which have established sovereign storage systems to safeguard national wealth and strengthen economic resilience.
The Bank of England, founded in 1694, serves as the United Kingdom’s central bank, responsible for monetary policy, financial stability, and reserves management.
It is one of the world’s leading custodians of central bank gold, storing bullion on behalf of over 70 nations.
Critics, however, note that storing gold abroad can expose countries to foreign jurisdiction risks. Several states, including Germany and Venezuela, have in the past repatriated their gold reserves over fears of restricted access during geopolitical tensions.
Dahir’s letter has reignited debate on whether Kenya should follow a similar path — prioritizing sovereign control over convenience — as it seeks to diversify its assets in an increasingly uncertain global financial environment.
