Uganda’s Ministry of Finance has recently revealed that the gold trade in Uganda has regained its position as the leading export, according to the latest data compiled from the past 12 months until February.
Gold trade contributed to a significant 37% of the total export revenues during this period.
According to Business Insider, Gold was a big deal in Uganda before accounting for over 44% of Uganda’s export income but tax issues hampered the trade and watered down its effect on the Ugandan economy.
This interruption of the gold trade by tax issues lasted for over a year.
In May 2023, the Ugandan Parliamentary Committee on Finance, Planning, and Economic Development revealed that Uganda had missed out on approximately $160.77 million in unpaid taxes from the export of gold products since July 2021 as a result of a disagreement with exporters and refiners regarding fees.
Ruth Nankabirwa, the Minister for Energy and Mineral Development in Uganda, stated that the loss was due to a disagreement between the Uganda Revenue Authority and more than 20 gold exporters and refiners.
However, a newspaper based in Uganda stated that the gold industry has experienced a resurgence in the country, generating over $228.4 million monthly in the twelve months up to February.
The report also indicated that the gold trade made up 37% of the total export revenue, totaling $2.7 billion, which was roughly one-third of the overall export income of $7.4 billion, establishing it as the leading export of the East African country at that time.
What To Be Aware Of
- The revenue figures stated above indicate that around 45,988 kilograms of gold were sold during the financial year, a monthly average of 3,538 kilograms.
- The major importers of Uganda’s gold are countries in the Middle East, particularly the United Arab Emirates which imported about 98% of Uganda’s gold.
- Besides the Gold Trade, Tourism is also a big revenue earner for the Ugandan economy.
Central Says Uganda Gold Exports Jump More Than10-Fold In 2023
The most recent data from the Central Bank reveals that Uganda experienced a more than tenfold increase in gold exports in 2023, even in the face of U.S. sanctions on a major processor in the East African country.
Uganda, which has emerged as a major hub of gold trade in the region, exported gold worth $2.3 billion in 2023, compared with $201 million over the previous twelve months, Bank of Uganda data showed.
The huge increase was likely driven by exports from some new processors including a Chinese plant, Wagagai Mining Ltd, in eastern Uganda, said Stephen Turyahikayo, who researches the mining sector in the Great Lakes region.
“It was likely a result of the new capacity from that Chinese plant and possibly smaller others,” he told Reuters.
Exporters have also been taking advantage of a suspension of tariffs on gold exports last year, said an official from the Ministry of Energy and Mineral Development who asked not to be named because he was not authorized to speak publicly.
In 2022, the United States imposed sanctions on Belgian businessman Alain Goetz and a network of companies connected to him, including African Gold Refinery, one of Uganda’s biggest gold refiners.
The U.S. accused Goetz of being involved in the illicit movement of gold from the Democratic Republic of Congo. Goetz denied the accusation.
