The case
Domestic purchase programmes, pursued by several African central banks, allow reserves to be accumulated in local currency rather than by spending scarce foreign exchange. They also give licensed and cooperative producers a legal counterparty at a transparent price, which is the single most effective anti-smuggling instrument available.
The catch
Reserve gold must eventually be acceptable to international counterparties. Metal accumulated without a robust provenance record can be difficult to monetise, and any suggestion of undocumented feed entering reserves creates a reputational exposure disproportionate to the tonnage involved.
The programmes that work are the ones with an accredited refiner in the middle and an audit trail from the point of purchase.
Sequencing
Traceability infrastructure first, purchase volume second. Reversing that order has produced reserves that sit on the balance sheet and cannot be sold at market.