The Ministry of Energy has introduced new measures to regulate the export and sale of gold, addressing growing concerns over discrepancies between the quantities of gold mined in Uganda and those exported, primarily to the United Arab Emirates. The measures were announced by Permanent Secretary Irene Batebe.
Regional and international reports have highlighted Uganda’s lack of strict enforcement of the International Conference on the Great Lakes Region (ICGLR) protocols, which aim to prevent the trade of illicit gold from the Democratic Republic of Congo (DRC) and neighboring countries. Illicit gold trade has been linked to some of the most severe conflicts in the Great Lakes region.
According to Batebe’s statement, gold trading will now only be permitted between parties holding valid licenses, including mineral dealer’s licenses for precious minerals, mining licenses for gold, or refining licenses for gold.
The new regulations are the result of consultations with the Uganda Revenue Authority’s (URA) Customs department and the Directorate of Geological Surveys and Mines (DGSM).
Both URA and DGSM have distinct responsibilities in regulating gold exports, but they have historically reported differing figures regarding Uganda’s gold production.
Gold has become a critical sector for Uganda’s economy, emerging as the country’s leading export earner.
In 2022, Uganda exported over $2 billion worth of gold. The Central Bank of Uganda announced plans in mid-August 2022 to begin purchasing locally-produced gold. This initiative was designed to bolster the country’s foreign reserves and mitigate risks in international financial markets.
The Bank also anticipated that reducing raw gold imports would contribute to a decrease in total imports, further stabilizing the economy.
These measures reflect Uganda’s commitment to addressing discrepancies in the gold sector and aligning with international standards to ensure responsible trade.
“By purchasing gold directly from the artisanal miners, BOU will also be supporting the livelihoods of artisanal and small-scale miners. It also aims at mitigating the declining foreign currency reserves and addressing the associated risks in the international financial markets” said a statement.
The Ugandan government has intensified efforts to regulate its gold sector amid growing concerns over smuggling, under-declaration, and lost revenue from artisanal mining activities.
Gold produced by artisanal miners in Uganda has been consistently underreported, depriving the government of vital tax revenues.
The sector has also been plagued by illicit gold buyers who bypass legal channels, selling directly to the country’s refineries. Currently, Uganda is home to at least five licensed gold refineries, including African Gold Refinery, Simba Gold Refinery, and Bullion Gold Refinery. These facilities operate under a Manufacture Under Bond warehouse license granted by the Uganda Revenue Authority (URA).
Local leaders in gold-mining districts have expressed concerns over the government’s decision to waive royalties for gold mined by artisanal and small-scale miners.
They argue that this policy has cut off a critical revenue source for local governments while leaving unresolved social and environmental issues related to artisanal mining.
To curb illicit trade, the government recently imposed a $200 export tax per kilogram of gold and introduced a $270 importation permit fee under the Mining and Mineral (Licensing) Regulations of 2023.
For imported minerals, exporters must present documentation proving the source and payment of royalties in the country of origin. Additionally, export permits will only be issued for refined gold meeting a purity level of 99.9%.
A report by SwissAid in May 2024 highlighted Uganda as a major hub for smuggled gold in Africa, particularly from the Democratic Republic of Congo (DRC). Contraband gold often travels through Uganda and Rwanda before reaching international markets, such as Dubai.
The report emphasized that smuggling deprives governments in the region of up to $22 million annually in lost tax revenues while undermining governance and stability.
In response to these challenges, Uganda has achieved significant milestones in combating smuggling. In May 2024, Uganda became the fifth country in the Great Lakes Region to attain the Regional Certification Mechanism (RCM) under the International Conference on the Great Lakes Region (ICGLR).
This certification ensures compliance with regional standards for the trade of tin, tantalum, tungsten, and gold. The certification aligns with the ICGLR’s Pact on Security, Stability, and Development, aiming to prevent the illicit exploitation of minerals.
Reports have identified two types of contraband gold trade in the ICGLR region: in-region cross-border smuggling, where gold is transported illegally between member states, and out-region smuggling, where gold is exported without permits or royalties to destinations such as Dubai.
The U.S. government has also raised alarms over the risks associated with illicit gold trade. In May, multiple U.S. agencies issued an advisory warning of the gold trade’s links to conflict financing, money laundering, sanctions evasion, and human rights abuses, particularly involving actors such as the Wagner Group. They urged industry participants to adopt rigorous due diligence measures to mitigate these risks.
These efforts reflect Uganda’s commitment to addressing smuggling, strengthening regulations, and ensuring that the gold sector contributes meaningfully to national and regional development.
“U.S. individuals and entities engaged with the gold sector—whether as miners, traders, refiners, exporters, users, consumers, financial institutions, or otherwise—should carefully review the risks described in this Advisory and ensure they conduct enhanced due diligence to address these risks, as appropriate and necessary” reads part of the statement.
“Individuals and entities engaged in the gold sector across the continent in countries or localities where corruption may be a concern should be aware of the risks associated with smuggling, including potentially facilitating the violation of economic sanctions, tax evasion, money laundering or other financial crimes related to smuggling,” it said.
