Uganda’s gold export sector is under scrutiny as the Uganda Revenue Authority (URA) admits it cannot accurately trace the origins of gold leaving the country, exposing critical gaps in the nation’s regulatory framework. The issue, highlighted in the latest Extractive Industries Transparency Initiative (EITI) report, underscores a systemic challenge in verifying the production, trade, and taxation of one of Uganda’s most valuable exports. Lawrence Muwonge, URA’s manager for extractives, emphasized that the lack of reliable data stems from the informal nature of much of the country’s gold mining, which operates outside formal systems of record-keeping and oversight.
The problem begins at the mining sites, where artisanal miners—estimated to account for a significant portion of Uganda’s gold output—produce gold without formal documentation. Muwonge stated that URA lacks the capacity to monitor daily production or track sales, as these miners often operate in remote areas with minimal regulatory presence. “Even just to know what he has sold in a day or what he has produced in a day, it is next to impossible,” he said, noting that continuous monitoring would require URA officials to be present at every mine, a logistical impossibility.
The challenges extend beyond the mines. While gold refiners, who process raw gold into marketable forms, are easier to track due to their fixed locations, URA faces difficulties in verifying the sources of their raw materials. Muwonge pointed out that refiners often report transactions that defy commercial logic. “The refiner is one person who will tell you, I have bought gold of $10. I have sold gold of $10, which mathematically cannot work out,” he said, questioning how such operations could sustain costs like wages and utilities. This inconsistency raises concerns about the accuracy of export data and the potential for revenue leakage.
The EITI report for the 2023/24 financial year revealed significant discrepancies in the reporting of extractive-sector revenues. Of the 20 companies included in the reconciliation exercise, only 13 submitted complete reporting templates, while seven failed to report entirely. The non-reporting entities accounted for 31.9 billion shillings, or 3% of the total extractive revenues under review. The quality of the data was also alarming: 16 out of 20 companies submitted unsigned templates, representing 645.2 billion shillings, or 98.5% of the reconciliation scope. In contrast, URA, the Directorate of Geological Survey and Mines (DGSM), and the Petroleum Authority of Uganda provided signed reports, highlighting a stark disparity in compliance.
Gold, which constitutes a major portion of Uganda’s extractive exports, is at the center of the data gaps. The EITI report compared import and export declarations by gold-related companies, revealing discrepancies in reported quantities and values. For instance, Thaba Investments reported imports of 12,377,803 kilograms and exports of 12,657,815 kilograms, while Simba Gold Refinery recorded imports of 7,619,029 kilograms against exports of 7,798,408 kilograms. These inconsistencies, though not necessarily indicative of missing gold, underscore the lack of transparency in the supply chain.
The discrepancies between government agencies’ records further complicate the picture. URA’s data for 2023/24 showed 46,263 kilograms of gold exports valued at approximately $2.98 billion, while the Bank of Uganda reported 48,620 kilograms valued at $3.09 billion. The 2,357-kilogram difference highlights the challenges in reconciling data across institutions. Muwonge attributed the gaps to the informal mining sector, which he described as a “weak link” in the regulatory chain. “Artisanal mining has improved livelihoods, but taxation remains a problem,” he said, noting that many miners operate without formal registration or tax compliance.
The issue of ownership control adds another layer of complexity. URA has encountered mining operations that appear Ugandan-owned but are managed by foreign nationals. In one case, a mine in western Uganda was found to have over 50 excavators and numerous Chinese expatriates, despite being registered as a local entity. Similarly, a northern Ugandan operation reportedly housed 60 Chinese nationals, far exceeding the company’s stated employment figures. Such cases complicate efforts to enforce tax obligations and ensure compliance with export regulations.
The regulatory contradictions within the government exacerbate the problem. While the DGSM licenses mining operations, export restrictions and levies are enforced by other agencies. Muwonge highlighted the conflict: “We have a ban on export. The DGSM has licensed. You have licensed a person who has a ban. The person is producing. Do you think you will take care of that production?” This institutional misalignment undermines the effectiveness of policies aimed at protecting public revenue.
Taxation policies also face scrutiny. The current gold export levy of $200 per kilogramme, set in 2023, has not kept pace with the rising international price of gold, which increased from $45,000 to over $160,000 during the period. Muwonge argued that the fixed levy fails to capture the full value of the commodity, leading to underpayment of taxes. URA data shows billions of shillings in unpaid levies, while the Auditor General has raised concerns about unpermitted exports and non-compliance.
The challenges extend beyond gold. The EITI report identified discrepancies in the reporting of other minerals, with the “Other” category in the mining-sector export table totaling 1.66 trillion shillings. This suggests that the transparency issues are not isolated to gold but reflect broader systemic weaknesses in Uganda’s mineral governance. Muwonge emphasized the need for inter-agency collaboration, stating, “The URA wants to shine. The DGSM wants to shine.” He argued that integrated systems and shared data would improve compliance and revenue collection.
The EITI process aims to address these gaps by promoting transparency, but the latest findings reveal that Uganda’s ability to account for its mineral wealth remains uncertain. The country’s gold exports, valued at over $3 billion in 2023/24, are a critical revenue source, yet the lack of a reliable chain from production to export threatens to undermine its economic benefits. As Muwonge concluded, “The more difficult question is whether the country has a sufficiently reliable system to account for the gold being mined, refined, exported, and the revenue due to the Ugandan public.”
The situation underscores the urgent need for reforms to strengthen oversight, enhance data sharing, and align regulatory frameworks. Without such measures, Uganda risks losing a significant portion of its mineral wealth to inefficiencies, corruption, and regulatory fragmentation. The EITI report serves as a wake-up call, urging stakeholders to prioritize transparency and accountability in the extractive sector to ensure that Uganda’s natural resources benefit the nation as a whole.