Most gold from the DRC was smuggled through Uganda and Rwanda and, to a lesser extent, Burundi (some of the gold from South Sudan also transited through Uganda and 60% of the gold from Uganda.
Uganda remains one of the hotbeds for
smuggled in Africa according to Swiss
organization SwissAid. The
organization says apart of the gold smuggled from neighboring countries through
Uganda, most of the gold produced by artisan miners in the country tends to be under
declared or not to be declared.
The report said private jets carrying gold from Africa
that land in the UAE often come from African countries known to be transit
countries in the gold trade, such as Uganda.
“Most gold from the DRC
was smuggled through Uganda and Rwanda and, to a lesser extent, Burundi
(some of the gold from South Sudan also transited through Uganda and 60% of
the gold from Uganda, 95% of the gold from Rwanda and 99% of the gold from Burundi
was imported into the UAE, “ said the report.
Gold from Uganda into UAE was slightly
below 50, 000 kilograms in 2022 according to a report by Department of Economic
and Social Affairs of the United Nations.
Using data on declared and
undeclared gold imports over a ten-year period ending in 2022, Swiss
organization SwissAid estimates
that the illicit trade amounts to between $23.7-billion and $35-billion
annually in Africa.
The dark side of gold: “On the trail of African gold: quantifying
production and trade to combat illicit flows', uncovers the scale of exploitation of
artisanal gold miners to fund war, terrorism and organised crime, urging
greater transparency in the sector.
It said more than 435 tonnes of gold was smuggled out of Africa in 2022,
representing more than a tonne a day.
According
to the report, the price of gold on 1 May 2024, this corresponds to a value of
USD 30.7 billion.
The majority of the gold was imported into the United Arab Emirates (UAE)
before being re-exported to other countries.
Adding together total
declared gold production and estimates of undeclared ASM gold production gives
total gold production for the African continent of between 991.4 and 1,144.6
tonnes in 2022.
At the price of gold on 1 May
2024 (USD 73,862/kg at 2.15pm43), this represents a commercial value of between
USD 73.2 billion and USD 84.5 billion.
By comparison, the
consultancy Metal Focus estimated total gold production in Africa at 979 tonnes
in 2022.
According to Metal Focus, global production of
mined gold was 3,627.7 tonnes in 2022.
Thus, gold production in Africa
accounts for between a quarter and a third of global gold production in 2022. A
comparison of the data reveals that between 32% and 41% of the total gold
produced in Africa was not declared at the production stage in 2022.
Part of the 777 tonnes of gold declared
for export in African countries in 2022 was not declared at the production stage
or crossed a border illegally before being declared.
Similarly, some gold exports were the
result of false declarations or are tainted by under-declaration.
Of the 777 tonnes of gold declared for
export in African countries in 2022, around 153 tonnes was exported to another
African country, while 624 tonnes was exported directly to a non-African
country.
Intra-African trade thus represents
only about 20% of the volume of gold declared for export in African countries.
Findings of the report were presented at virtual session on
artisanal and small-scale mining (ASM) organized by the Extractive’s Industries
Transparency Initiative’s (EITI) international Secretariat.
The
session was aimed at strengthening the capacity of multi-stakeholder groups to
disclose and use Artisan Miners-related data, and to raise awareness on artisan
mining characteristics.
Why Gold?
Mark Robinson, the
Executive Director of the EITI in an interview with URN
said gold is so important to many countries in Africa including Uganda.
“It
is one of your major minerals in Uganda right now. It has considerable and
significant revenue potentials. So that is why gold matters so much as compared
to other sections of mining” he said.
Illicit
gold trade negatively affects Uganda not just in term of revenue foregone,
which is actually in trillions of shillings, but also in terms of jobs and
wages lost.
Gloria Mugambe, the head of Secretariat at Uganda ETI (UGEITI) recently
indicated that gold mined by artisans remained what she described as a grey
area.
“We don’t know how much they produce, how many people are employed there.
So that is another area we want to study more, " she said
////Cue In “And we believe that looking…..
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The gold industry in Uganda is
significantly shaped by these artisanal and small-scale mining activities. Artisanal
and small-scale miners (ASMs) dominate the gold industry in Uganda and are
distributed across several regions. These regions include: Karamoja Region
(Amudat, Abim, Nakapiripirit, Napak, Kaabong, Moroto, Nabilatuk, and Kotido)
Eastern Region (Busia, Bugiri, and Namayingo districts).
In the 2020-2021 report,
UGEITI said Uganda produced minerals worth 19 billion shillings while the
2021-2022 report said production from the mining was work 202 billion
shillings.
The 2021-2022 report said Uganda
had a 1649 percent increase in gold production.
The UGEITI report was based
on the data provided by the Directorate of Geological Surveys and Mines (DGSM).
The gold production figure by
the Directorate of Geological Surveys and Mines (DGSM) was much less than the
export figures reported by Uganda Revenue Authority.
The discrepancies in gold export
and production figures reported by the two government entities raised suspicions
of either under declaration or a possibility that Uganda has been exporting
gold that it does not produce. Others have argued that there should have been
data to indicate that some of the gold was imported.
“Do we actually know how much gold we are
producing internally specially from the artisan miners? Because we might be
reporting what we are exporting as a discrepancy between URA and DGSM and
refelecting that as if it is gold coming out of Uganda” notes Dr. Henry Bazira
of water Governance Institute.
Bazira said there is need for
distinction between what is being produced in Uganda and what is imported and exported.
David Sebagala,
Senior Inspector of Mines at the Ministry of Energy said the discrepancies in
figures by provided URA and DGSM could be ending with the 2021/2022 reporting
period. He said the discrepancies arise from the fact that the law did not provide
for standalone gold processing or refining facilities.
“So the biggest source of information on gold
exports are the gold refineries. In the period that is being reported, the law did
not provide that DGSM regulates standalone refining facilities,” Sebagala revealed.
He explained that when
the refineries were established in Uganda, URA chose to license them under the manufacture
under bond scheme.
“And they are responsible for most of the export figures. We
are working with URA on how we are going to control our gates. Because URA
customs are the gate keepers. We are working out modalities on how mineral
flows should be controlled. Both incoming and outgoing,”
Parliament enacted the Mining and Minerals Act, 2022
(the “MMA”) which came into force on. 13th October 2022,
replacing the Mining Act, 2003.
How much gold is
being produced in Uganda?
Sebagala said the
volume of gold being produced in Uganda can be determined by how much mercury is
being used during the extraction processes. He estimates that on average,
Uganda is producing between 2-3 tonnes of gold.
“That is from
artisan mining operations. But artisans in their nature they always want to
under declare. Even when there is no royalty on gold. They like to under declare
production. And that is why government decided to do away with royalty on gold.
Thinking that with no royalty, then they will declare what they have produced”
According to Sebagala,
the artisan miners tend to sell their gold to the refining facilities eve when
the government waived the royalties.
Royalties tend to be much –sought after in the districts with mining and
mineral operation because they form part of local revenue.
//// Cue In “But
what happened……
Cue Out…are tax exempt.”////
The EITI Standard requires
implementing countries to provide an estimate of informal sector
activity. Several countries also disclose information on the legal and
regulatory frameworks, licenses, registers, production, exports and revenues
linked to the ASM sector.
Smuggling
of Gold from Africa
The report found that a vast majority of African gold is
shipped to a few countries. Between 2012 and 2022, the UAE, Switzerland and
India were the top three countries importing gold from Africa. In 2022, these
countries were responsible for 80% of African gold imports abroad.
In 2022, according to official figures,
almost half of this gold was imported into the UAE. China and the “other
countries” category also appear to be major importers at first glance.
However, the report says a detailed
analysis of non-African countries’ import statistics shows that this is misleading.
It said the proportion of African gold
going to the UAE is likely to be even higher in reality than the official
figures indicate. Uganda is one of the 23 countries from Africa whose gold
exports have been registered in the UAE.
Gold imports from Africa to the UAE
more than doubled between 2012 and
2022, from 243 tonnes to 609 tonnes.
The 2022 figure, which corresponds to a trade value of USD 34.5 billion,
represents 58% of the total gold imported into
the UAE.
Some 78% of the gold from
Libya and 70% of the gold from the CAR was declared for import into the UAE.
Some of the gold from the CAR also transited through Cameroon111 and Rwanda112
before being imported into the UAE.
The gaps between gold exports from
African countries to the UAE and imports of African gold into the UAE have been
considerable throughout the 2012–2022 period. Over these eleven years, they
reach 2,569 tonnes in total, which corresponds to a trade value of around USD
115.3 billion.