A Nairobi law firm has petitioned the Central Bank of Kenya (CBK) to halt plans to store part of the country’s gold reserves with the Bank of England, warning that the move could erode Kenya’s economic sovereignty and expose national assets to foreign political risks.
In a letter dated October 23 and addressed to CBK Governor Dr. Kamau Thugge, Dahir, Affey & Associates LLP urged the Central Bank to suspend negotiations with the British institution pending a transparent national dialogue.
The firm, led by Managing Partner Abdulhakim Dahir Sheikh, said placing reserves under a foreign jurisdiction could make them vulnerable to asset freezes, sanctions, or political pressure.
“The decision to vest a portion of our national wealth in a foreign jurisdiction, under the control of another state’s legal system, is one of the most consequential financial decisions a nation can make,” Dahir wrote, warning that Kenya could face a situation similar to Venezuela, whose gold reserves in the UK were frozen during a diplomatic dispute.
The petition raised concerns over secrecy surrounding CBK’s dealings with the Bank of England, questioning who negotiated the agreement, its financial cost, and the legal protections for Kenya’s ownership rights.
The firm said the lack of public disclosure violated the principles of transparency and accountability guaranteed by the Constitution.
Parts of the ongoing conversation between the Kenyan government and the Bank of England include the logistics of bullion storage, as Kenya moves to expand its gold reserves in response to soaring global prices.
CBK Governor Thugge confirmed that talks with the Bank of England and other financial institutions were underway to determine how and where the reserves would be stored.
“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 in an interview in Washington.
He emphasized that the plan is meant to diversify Kenya’s foreign holdings rather than move away from the U.S. dollar.
Kenya currently ranks seventh in Africa in gold reserves, at 0.02 tonnes, joining countries like Ghana, Egypt, and Tunisia in efforts to strengthen financial resilience through bullion holdings.
