Ethiopia's national bank has been told to inspect all the gold in its vaults to determine its authenticity. It follows the discovery that some of the “gold” it had bought for millions of dollars was gold-plated steel.

The first hint that something was wrong reportedly came when the Ethiopian central bank exported a consignment of gold bars to South Africa. The South Africans sent them back, complaining that they had been sold gilded steel.

An investigation revealed that the bank had bought a consignment of fake gold from a supplier, who is now under arrest. Other arrests followed, including business associates of the main accused; national bank officials; and chemists from the Geological Survey of Ethiopia, whose job it is to assay the bank's purchases of gold and certify that they are real.

But what has clearly now got the government even more worried is that another different batch of gold in the bank's vaults has also been found to be fake, and this time it was gold which had been there for several years, after being seized from smugglers trying to take it to Djibouti.

The Ethiopian parliament's budget and finance committee ordered the inspection of all gold in the national bank's vaults. A report from the auditor-general on the affair is expected to be presented to parliament during its current session.

Gold is mined in Ethiopia in considerable quantities, and a trader selling gold to the central bank has to have it tested and certified by the Geological Survey. Whether the bank bought fake gold in the first place, or whether real gold from the vaults has been swapped for gilded steel, the fraud has cost the bank many millions of dollars, and it must have involved collusion on a considerable scale.