Uganda: Gold Miners Exported 8,000kgs but Declared Only 16kgs

19 September 2019

Gold miners in Uganda officially declared only 16.3kgs despite exporting at least 8,691kgs declared, civil society organisations, the Anti-Corruption Coalition (ACCU) and Transparency International Uganda (TIU) have said.

Marlon Agaba, the head of programmes at ACCU and Elizabeth Kulume the programmes assistant at TIU said that based on records from the Directorate of Geological Survey and Mines and Uganda Revenue Authority (URA), miners declare less than 3 per cent of gold extracted every year.

The team said that their recent visit to the Directorate of Geological Survey and Mines (DGSM) revealed that the only 16.3kg of gold was declared by different miners yet URA cleared exportation of 8,691 kgs in the financial year 2016/2017.

Agaba said they suspect there is connivance of miners with officials at DGSM to under-declare extracted gold or it was a deliberate effort by miners to hoodwink the responsible body that gold scarce which is not the case.

"It is very difficult to track the output and determine the royalties drawn from the sector. The body responsible for inspecting mines issued out gold export permits for 16.281kg, compared to URA, which indicates that 8,691kg of gold valued $339.09 million were exported from Uganda in the financial year 2016/2017," Kulume said.

Kulume noted also cast doubt on why some gold export permits for an exporter were supported by export permits from Trade ministry as opposed to being issued by DGSM as stipulated by the Mining Act, 2003.

Efforts to speak to the DGSM director Zachary Baguma and permanent secretary Energy ministry, Robert Kasande, were futile as they did not respond to repeated calls. Mining Regulations (2004) an instrument of the Mining Act (2003), the minerals obtained under a mineral right or under mineral dealer's license may only be exported under an export permit granted by the commissioner at DGSM in the ministry of Energy and Mineral Development.

Agaba said under declaration of extracted gold does not only hamper the country's economy but leaves permanent damage to areas where an extraction has been done since there will be no financial resource to land restoration.

"There is no evidence of payment of royalties on the exported gold. This implies that Uganda lost revenues ranging from $3.39 million to $16.95 million in royalties from the undeclared gold exports and imports depending on the applicable rates of 1 to 5 per cent for the imported or locally mined gold respectively," Agaba said.

The CSOs concerns were raised in auditor general reports of 2014 and 2015 where Shs 679 million of unpaid royalties by Hima Cement had been registered. This was attributed to failure by DGSM to enforce payments.

The auditor general advised the government to expedite the investigation of the discrepancies with a view of recovering the prescribed royalties. CSOs have called upon the government to put in place measures to nip corruption and human rights abuses in the extractives industry.

"Most importantly, we call upon the government to ensure proper implementation of policies to address the issue of royalty sharing not only to increase the percentage of the Gross Domestic Product (GDP) but also ensure that the royalties benefit the communities in which mining activities take place," Agaba said.

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