Uganda has emerged as a critical transit hub for smuggled gold in Africa, with billions of dollars’ worth of the precious metal flowing through its borders each year.
According to a report by SwissAid, large quantities of gold, much of it mined in neighboring countries like the Democratic Republic of Congo (DRC) and South Sudan, are funneled through Uganda before being shipped to global markets.
Private jets, laden with gold, frequently depart Uganda for the United Arab Emirates (UAE), a major global gold trading hub.
In 2022, Uganda officially exported nearly 50,000 kilograms of gold to the UAE, but experts say the true scale of trade is far higher.
A significant portion of this gold is either under-declared or entirely unrecorded, fueling concerns over corruption, exploitation, and the role of the trade in financing armed conflicts and organised crime across the region.
“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.
Uganda exported nearly 50,000 kilograms of gold to the United Arab Emirates (UAE) in 2022, according to a report by the United Nations Department of Economic and Social Affairs.
However, experts warn that a significant portion of this trade remains undeclared, fueling concerns about illicit flows.
SwissAid, a non-governmental organization, estimates that Africa’s illicit gold trade is worth between $23.7 billion and $35 billion annually.
Their report, On the Trail of African Gold: Quantifying Production and Trade to Combat Illicit Flows, highlights how gold smuggling funds war, terrorism, and organized crime.
In 2022 alone, over 435 tonnes of gold, valued at $30.7 billion, were smuggled out of Africa, much of it routed through the UAE.
The report estimates that Africa’s total gold production in 2022, including undeclared artisanal and small-scale mining (ASM), was between 991 and 1,145 tonnes, worth as much as $84.5 billion.
This figure accounts for up to a third of global gold production. Yet, up to 41% of Africa’s gold went undeclared at the production stage, raising questions about under-reporting and illegal trade.
The findings were shared during a virtual session by the Extractive Industries Transparency Initiative (EITI), calling for stronger oversight and greater transparency in the ASM sector.
Experts at the session emphasized the need to close loopholes enabling false declarations and illicit exports, particularly as intra-African trade accounted for only 20% of declared gold exports in 2022.
Gold has become a crucial mineral for Uganda, offering significant economic potential, according to Mark Robinson, Executive Director of the Extractive Industries Transparency Initiative (EITI).
Robinson highlighted gold’s importance, stating that 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.
However, Uganda’s gold industry faces challenges, particularly due to the illicit gold trade, which deprives the country of trillions of shillings in revenue. Beyond financial losses, it also impacts job creation and wage growth.
Gloria Mugambe, head of the Uganda EITI Secretariat (UGEITI), noted that artisanal and small-scale mining (ASM) remains a grey area in Uganda’s gold industry.
“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 during a recent engagement. She stressed the need for better oversight and management of the ASM sector to unlock its full potential.
Artisanal miners dominate Uganda’s gold production, operating in key regions such as Karamoja (Amudat, Abim, Nakapiripirit, Napak, Kaabong, Moroto, Nabilatuk, and Kotido) and parts of the Eastern Region (Busia, Bugiri, and Namayingo).
While artisanal and small-scale mining (ASM) significantly contributes to Uganda’s gold industry, the lack of clear data on production and employment remains a challenge. This gap emphasizes the need for reforms to improve transparency and better capture revenue from the sector.
According to Uganda’s Extractive Industries Transparency Initiative (UGEITI), gold production saw a remarkable increase in recent years. The 2020-2021 report valued minerals at 19 billion shillings, while the 2021-2022 report indicated a sharp rise to 202 billion shillings, with a 1,649% increase in gold production.
However, UGEITI’s figures, based on data from the Directorate of Geological Surveys and Mines (DGSM), appeared to conflict with export data from Uganda Revenue Authority (URA), raising questions about discrepancies between reported production and exports.
Some have speculated that either under-declaration or illegal gold exports could explain the difference, while others argue that gold imports should be accounted for in the data.
Dr. Henry Bazira from the Water Governance Institute questioned, “Do we actually know how much gold we are producing internally, especially from the artisan miners? Because we might be reporting what we are exporting as a discrepancy between URA and DGSM, reflecting that as if it is gold coming out of Uganda,” he stressed the importance of distinguishing between domestic production and imports.
David Sebagala, Senior Inspector of Mines at the Ministry of Energy, suggested that discrepancies could be resolved by the 2021/2022 reporting period. He attributed the inconsistencies to a lack of legal provisions for regulating standalone gold processing or refining facilities.
“So, the biggest source of information on gold exports are the gold refineries. In the period being reported, the law did not provide that DGSM regulates standalone refining facilities,” Sebagala explained.
He further noted that the establishment of refineries in Uganda led URA to license them under the manufacture under bond scheme, complicating the reporting process.
The Ministry of Energy, in collaboration with Uganda Revenue Authority (URA), is working on improving the control and regulation of mineral flows, both incoming and outgoing, across Uganda’s borders.
David Sebagala, Senior Inspector of Mines, noted that refineries play a key role in Uganda’s gold export figures, as they are largely responsible for tracking gold exports.
The Ministry is exploring ways to strengthen gatekeeping at these points to ensure better regulation and transparency.
The Mining and Minerals Act, 2022 (MMA), which replaced the Mining Act of 2003, came into force on October 13, 2022. This new law is expected to further address issues surrounding gold production and trade in the country.
When asked how much gold is being produced in Uganda, Sebagala pointed to mercury usage during the extraction process as a key indicator. He estimates that Uganda produces between 2 to 3 tonnes of gold annually from artisanal mining operations.
However, he highlighted that artisanal miners often under-declare their production figures, driven by a desire to minimize official reports.
To address this, the government waived gold royalties in the hope that it would encourage miners to declare their actual production.
“That’s why government decided to do away with royalty on gold. Thinking that with no royalty, then they will declare what they have produced,” Sebagala explained.
However, despite the waiver, artisanal miners often sell their gold directly to refineries, where the gold is typically unreported.
Royalties remain an important source of local revenue in mining districts, even though the government removed them for gold. This is an area where more robust regulation and transparency are needed.
The Extractive Industries Transparency Initiative (EITI) Standard requires countries to estimate informal sector activity, with many nations also disclosing information about the legal frameworks, licenses, production, exports, and revenues linked to the artisanal and small-scale mining (ASM) sector.
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