When the gold price hit 1,900 dollars per troy ounce in 2011, three times it’s worth from just a few years earlier, some of the main beneficiaries were African economies. Governments from Burkina Faso to Sudan rejoiced, because the net worth of their exports and mineral reserves were suddenly skyrocketing and foreign investors lined up to bankroll the expansion of mines and the exploration of promising geological formations.

Grey market prices followed the lead of the international commodity exchanges. Soon, thousands of Africans swelled the ranks of the artisanal miners working the continent’s myriad informal mines. While conditions are hard in this line of business, digging for gold suddenly offered a higher income than toiling fields.

In 2013, the party ended. Gold has since lost a third of its value, trading at just above 1,200 dollars today.

This could have profound consequences for a range of African countries. Many governments planned to use the increased foreign investment and royalties from the gold sector to push the transformation of their economies, increase public expenditure and get reelected. Young men are facing layoffs at commercial and informal mines and families will see their housdehold income reduced. Already, some countries like the Sudan experience serious economic troubles as an effect and this may have contributed to large and violent public protests.

This story will focus on the political and economic ramifications of the development of gold prices in Africa over the last years. I will explore how governments, investors and private actors reacted to the boom before 2013 and what they are experiencing during the current bust.

I will draw on my own observations, made during 2012 and 2013 in Burkina Faso and Ghana, as well as interviews with market analysts, NGO workers, academics and politicians from both international institutions and the African countries in question.

Some of the issues are covered in one of my recent blog posts, although it is limited to the case of Sudan and written without much in the way of dedicated research: http://continentofriches.com/can-gold-save-sudans-economy/

If successful, your support here on Contributoria will enable to me to research this important and fascinating story thoroughly. I would value the input of the community regarding additional interview partners and of course look froward to the collaborative editing process.

The final piece will have between 1,000 and 1,500 words.

Please feel free to come back to me with any questions you may have. You can reach me via email at info@peter-doerrie.de or on twitter: @peterdoerrie

Image by Flickr user Image Journeys, CC-BY-ND

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