The Uganda Revenue Authority (URA) is facing significant challenges in tracing the country's gold exports, worth billions of dollars. According to Lawrence Muwonge, URA manager responsible for extractives, the problem begins at the mining sites, where most of Uganda's gold is produced by artisanal miners operating outside formal systems of production and record-keeping. This makes it difficult for URA to establish how much gold is produced, sold, or who buys it.
The issue persists even when gold leaves the mine, as URA struggles to determine the origin of gold purchased by refiners. Although refiners operate from identifiable premises and their exports can be tracked, Muwonge says it is nearly impossible to establish from whom they buy gold. He cites examples of transactions that do not make commercial sense, such as a refiner buying and selling gold at the same value while still covering operating costs.
The difficulties in tracking gold exports are reflected in Uganda's latest Extractive Industries Transparency Initiative (EITI) report. The report reveals gaps and discrepancies in the country's extractive-sector data, with only 13 of 20 extractive companies submitting reporting templates. The non-reporting companies accounted for 31.9 billion shillings, or 3% of total extractive revenues. The quality of corporate reporting was also a concern, with only four companies submitting signed reporting templates.
Gold is at the center of the problem due to the large scale of the trade. The EITI report compares import and export declarations by gold-related companies, revealing substantial differences between reported quantities and values. For example, Thaba Investments reported imports of 12,377,803 kilogrammes and exports of 12,657,815 kilogrammes, while Simba Gold Refinery reported imports of 7,619,029 kilogrammes against exports of 7,798,408 kilogrammes.
Discrepancies in gold export figures are also evident when comparing data from different government agencies. URA records show about 46,263 kilogrammes of gold exports valued at approximately $2.98 billion in the 2023/24 financial year, while Bank of Uganda records put gold exports at about 48,620 kilogrammes, valued at approximately $3.09 billion. The difference is about 2,357 kilogrammes.
Muwonge attributes the weakest link in tracking gold exports to the informal mining sector, particularly artisanal mining. He notes that while artisanal mining has improved the livelihoods of many communities, it poses significant challenges for taxation and regulation. The problem is compounded by the difficulty of establishing who controls some mining operations, with URA encountering mines that appear to be Ugandan-owned but are operated by foreign nationals.
The consequences of these challenges extend beyond data quality, with implications for government policy and regulation. Uganda has a policy and regulatory framework restricting the export of minerals, while gold exports are subject to an export levy. Muwonge highlights the institutional contradiction where one government agency licenses a mining operator while another is expected to enforce restrictions on the export of minerals produced.
Key points
- The Uganda Revenue Authority faces significant challenges in tracking the country's gold exports.
- Discrepancies in gold export figures are evident when comparing data from different government agencies.
- The informal mining sector is a major contributor to the challenges in tracking gold exports.
