Cash-strapped Lebanon finds itself sitting on a gold mine, as precious metal prices surge

BOURJ HAMMOUD, Lebanon (AP) — Tiny Lebanon sits on one of the largest gold reserves in the Middle East and its government is weighing whether it can use that stockpile to restore a crippled economy while its citizens are looking at gold as a way to protect their battered assets.

Lebanon’s economy hobbled into 2026 with ongoing inflation and state decay and no reforms to combat corruption in sight. Its banks collapsed in late 2019 in a crippling fiscal crisis that evaporated depositors’ savings and plunged about half its population of 6.5 million into poverty, after decades of rampant corruption, waste, and mismanagement. The country suffered some $70 billion in losses in its financial sector, further compounded by about $11 billion in the 2024 war between Israel and the Hezbollah militant group.

The price of gold recently soared to an all-time high of $5,354, before dropping back below $5,000, sparked by geopolitical instability and questions surrounding U.S. President Donald Trump’s desire to lower interest rates that would ultimately devalue the dollar. Global central banks have been among the most avid buyers. Silver prices meanwhile have also surged due to industrial demand and the attractiveness of a much cheaper price than gold.

The central bank in Beirut has maintained a reserve of 286 tons of gold - some nine million ounces - since the 1960s. Only Saudi Arabia’s central bank holds more in the region.

The government is considering using some of its gold reserves to bail out the banks and pay back depositors who got wiped out. But doing so would not only go against historical precedent, but also violate a 1980s-era law. Meanwhile, those depositors would like to make up some of their losses by buying gold and silver, hoping that prices will bounce back from the downturn of recent days and hit new highs.

At one point the value of Lebanon’s gold reserves reached $50 billion — over double Lebanon’s own GDP. After years of economic crisis, and pushback against meaningful reforms to make the country viable again, some are again raising a sensitive question: Is it finally time to dig into this goldmine?

A senior banking official told The Associated Press that some banks are proposing to dig into the gold reserves to help pay back depositors whose money was lost during the country’s currency crisis, essentially partially bailing out the banks with the country’s only viable public asset. The officials spoke on condition of anonymity in line with regulations.

Lebanon banned the sale of its gold in 1986 in the middle of the country's civil war to protect state assets during a time of extreme instability. The gold reserves have never been touched -- not after 15-year civil war in 1990, and not after multiple wars with Israel.

Some economists have proposed using a small percentage of the gold, in tandem with wholesale reforms, to fix Lebanon’s ailing electricity sector or to breathe life back into the country’s devastated education and healthcare system for the public good.

Parliament would have to vote to allow the use of the gold reserves in any capacity. It’s a largely unpopular move that is not expected to be made anytime soon, especially months before general elections. When gold was brought up in a session last week, Speaker Nabih Berri quickly interjected to shut down the conversation. “Not feasible,” he said sternly.

A draft fiscal gap law that offers a framework of returning some depositors’ losses is languishing in parliament amid a debate over who would absorb the losses: Lebanon’s battered banks, largely reluctant to hold themselves accountable, or an indebted and wasteful state.

Most Lebanese distrust the authorities, who for years have dodged implementing meaningful reforms to fight corruption, reduce waste, and improve public services. Given that track record, many say the gold should remain untouched for future generations.

While authorities debate the future of the country’s gold, many Lebanese depositors who lost most of their savings in the banks are now turning to gold and silver to own something more tangible while hoping it might even make up for some of their losses.

Crowds of people were lined up outside of Lebanon’s key metals trader on the northern outskirts of Beirut on a recent day, desperate to get inside and buy gold and silver coins, medallions, and bars.

They no longer trust the banks and are trying to get by in the middle of a messy cash economy beset with uncontrollable inflation and no meaningful reforms on the horizon.

“For those making up for losses, gold is not a safe haven — it’s the only haven,” said Chris Boghos, the managing director of Boghos SAL Precious Metals. Business is booming, as customers are now paying in advance to get their metal months later due to high demand.

Lebanon has had a troubled history in a volatile region, with numerous conflicts and economic shocks, and little trust that the structural issues will change.

“There has always been this propensity for the Lebanese people to go buy up gold in order to hedge against possible inflation, because this is a country that has seen multiple episodes of hyperinflation during its history,” said Sami Zoughaib, an economist at Beirut-based think tank The Policy Initiative.

Zoughaib says it’s an easy shift as well, given the long-tradition in the region of a groom or his family giving gold jewelry to the bride ahead of marriage as her own wealth, even among lower-income families. That tradition still largely continues even as many women have entered the workforce.

Outside one of Beirut’s gold markets Alia Shehade strolls along some of the storefronts. She says as a woman, her gold jewelry collection has made her feel safe in the middle of the financial crisis, referring to an Arabic saying that translates to “an adornment and treasure.”

“If a woman is in a tough situation ... she can sell her gold. And when gold prices go up, then she’s the winner,” she said. But she refuses to sell any of hers.

When looking at the reluctancy to sell gold among both the citizens and the authorities, Zoughaib said, “I think this just tells us just how important that gold is in the psychology of people."

"They are not even able to imagine a use case for it beyond being a hedge,” he said.

A vendor is seen through the window of a gold shop in Beirut, Lebanon, Monday, Feb. 2, 2026. (AP Photo/Bilal Hussein)

A couple check out pieces of gold at a shop in Beirut, Lebanon, Monday, Feb. 2, 2026. (AP Photo/Bilal Hussein)

Women look at the storefront of a jewelry shop in Beirut, Lebanon, Monday, Feb. 2, 2026. (AP Photo/Bilal Hussein)

People wait in line to buy gold and silver ounces at a gold and silver trader in the Beirut suburb of Bourj Hammoud, Lebanon, Monday, Feb. 2, 2026. (AP Photo/Bilal Hussein)

A Lebanese jeweler arranges gold ornaments at his shop's storefront in the Beirut suburb of Bourj Hammoud, Lebanon, Monday, Feb. 2, 2026. (AP Photo/Bilal Hussein)

NAIROBI, Kenya (AP) — It was designed to be as simple as buying airtime: a quick tap on the dispenser, a few shillings and a cooking canister refilled. Now, more than 3,000 Koko fuel supply points across Kenya sit idle, with no fuel and no clear answers for the households that relied on them.

For more than a decade, Koko Networks helped shift over 1.5 million Kenyan homes without access to public gas systems away from smoky charcoal stoves to bioethanol, marketed as a cleaner, modern way to cook. The steady blue flame became a symbol of Kenya’s push toward cleaner household energy.

That promise has dimmed.

After failing to win government letter of authorization that would allow them to sell carbon credits — permits that allow holders to emit certain amount of greenhouse gases — Koko abruptly shut down its fuel distribution network, bringing to a halt a model once hailed as a poster child of Africa's green transition.

In Kibera, Nairobi’s largest informal settlement, most Koko Networks outlets have closed, and some have removed the bioethanol dispensers altogether. Since 2014, Koko had imported bioethanol products. That ended abruptly in 2023 when the government withheld its import permit, forcing Koko to use local sources that were erratic and more expensive.

That reality is setting in for Fredrick Onchenge. He used to serve up to 50 Koko customers a day. Now his machines are silent.

“Initially, I was confused,” Onchenge said. “Then it dawned on me what had just happened. My livelihood was gone. I tried calling the salesperson, but their phone was switched off.”

For many customers, their access ended with a text message announcing the shutdown. Kitchens that once cooked meals without smoke now have idle double-burner stoves — reminders of a system that stopped overnight.

Grace Kathambi is weighing her options.

“This was a life changer for me,” Kathambi said. “I could not afford the $8 needed to refill a gas cylinder, and Koko was my best alternative. With about 30 U.S. cents, I could buy enough Koko fuel to cook.”

With the bioethanol supply cut off, households like hers must now choose between returning to charcoal or finding money for more expensive liquefied petroleum gas.

“I cannot afford to use gas,” said Margaret Auma. “Koko made life very easy for those of us who earn little from casual jobs. We feel abandoned, yet it’s not our fault.”

For weeks, Koko and the Kenyan government haggled over a crucial letter authorizing carbon credits and import permits for bioethanol made from molasses, a sugarcane by-product. The company needed those approvals to unlock millions of dollars in international financing that helped keep fuel prices low. Kenyan authorities held back, citing broader concerns about the credibility of carbon credits.

Koko — which counted the Microsoft Climate Innovation Fund, and South Africa’s Rand Merchant Bank as its investors, announced on Jan. 30 that without the approvals its business model was financially unsustainable and it was shutting down.

“Koko’s case is uniquely multidimensional,” said David Ndii, Kenya’s presidential advisor on economic affairs. Ndii cited issues including the Paris Agreement framework, questions around the credibility of cookstove carbon credits, Kenya’s climate policies, carbon market regulations, the transparency of Koko’s business model and diplomatic considerations.

He dismissed the prospect of state intervention, saying, “Even good doctors lose patients.”

Kenya's energy and treasury officials have declined to comment on the closure, which energy analysts say exposes weaknesses in how clean cooking is financed across Africa.

“The clean cooking situation in Kenya, and across Africa is a serious crisis,” said Amos Wemanya, a senior analyst on renewable energy at Power Shift Africa. “This is not just about emissions or climate targets. It is about development, health, dignity and household survival.”

Wemanya said models heavily reliant on carbon credits risk prioritizing markets over people.

“We are not going to solve the clean cooking challenge through carbon math or carbon credit spreadsheets,” he said. “Carbon markets allow polluters to continue emitting while households, who are supposed to be the beneficiaries, still pay for the stoves and bear the risks when projects fail.”

When such systems collapse, he added, it is households that suffer most.

“They are the ones forced to revert to harmful alternatives like charcoal and paraffin,” Wemanya said.

He said the Koko episode shows the priority should shift toward affordable electricity, especially in rural areas.

“Clean cooking will not be solved through carbon credits,” he said. “The reality is that gas-based solutions were never a long-term climate solution. They simply shift households from firewood to imported fossil fuels. So, the bigger lesson here is that we need to move toward systems that truly work, primarily electricity powered by renewable energy.”

For now, households like Auma’s must now choose between returning to charcoal or finding money for more expensive LPG.

“What are we supposed to do? Go back to using charcoal in our one-room houses?” Auma asked. “That is the smoke and sickness we were trying to escape.”

The Associated Press’ climate and environmental coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.

Amos Wemanya, senior climate advisor at Power Shift Africa, poses for a photo during an interview with The Associated Press in Nairobi, Kenya, Wednesday, Feb. 4, 2026. (AP Photo/ÅSA WALLIN)

Laurine Akhutu, a KOKO Cooker bioethanol fuel vendor, arranges fuel bottles at her shop in the Kibera informal settlement on the outskirts of Nairobi, Kenya, Wednesday, Feb. 4, 2026. (AP Photo/Atieno Muyuyi)

George Onsere, a KOKO Cooker bioethanol fuel vendor, poses for a photo outside his shop in the Kibera informal settlement on the outskirts of Nairobi, Kenya, Wednesday, Feb. 4, 2026. (AP Photo/Atieno Muyuyi)

A KOKO Cooker bioethanol fuel distribution booth with out of stock fuel is seen in the Kibera informal settlement on the outskirts of Nairobi, Kenya, Wednesday, Feb. 4, 2026. (AP Photo/Atieno Muyuyi)

Grace Kathambi uses a KOKO Cooker bioethanol fuel stove to fry and sell French fries at her shop in the Kibera informal settlement on the outskirts of Nairobi, Kenya, Wednesday, Feb. 4, 2026. (AP Photo/Atieno Muyuyi)