Uganda's gold can transform economy — Experts  

 

 

The gold prices currently range between $1,569 and $2,179 per ounce. 

 

Zackary Baguma, the commissioner in the directorate of geological survey and mines, said the sustained international gold demand is because of its enduring value since it does not get spoilt overtime or get counterfeited. 

 

"Gold has been used as money for over 5,000 years. It is divisible without losing value, unlike diamonds. The world's major consuming markets for gold are the Indian subcontinent, the Middle East and Asia," Baguma said. 

 

It is also used in the making of jewellery, electronics and in dentistry, he added. 

 

Baguma said Uganda has an estimated 7.8 million ounces of gold reserves, widely distributed in different parts of the country. 

 

He said notable occurrence are in Bushenyi, Mbarara, Kabale, Kisoro, Rukungiri, Kanungu, Busia, Mubende, Moroto, Kaabong, Kotido, Kapchorwa, Hoima and Abim districts and many parts of the West Nile. 

 

Baguma said the mineral sector can contribute significantly to the National Treasury and prosperity if challenges that affect the sector are fully addressed.  

 

According to him, Uganda could use gold to finance its budget, infrastructure, stop borrowing and pay off debts. 

 

The country has three gold refineries where artisanal and small-scale miners (ASM) can supply gold. The three are Africa Gold Refinery, Bullion Refinery and Simba Gold Refinery. 

 

However, the lack of clarity on gold royalty charges by the government makes artisanal miners fear to visit the refineries and instead choose to sell their find to middlemen cheaply. 

 

Most of this gold is believed to be smuggled out and ends up in places like London, Dubai and Switzerland, which have no gold deposits but direct the global gold trade. So it does not give the artisanal miners or communities around the mining areas real benefit. 

 

Frank Mugyenyi, the head of the Mining unit in the Department of Trade and Industry of the African Union Commission, says it is important to incorporate communities living around commercial gold mining projects. 

 

He said the communities should be helped to benefit from the vast deposits of gold located on their land.

 

According to Mugyenyi, this can be done by integrating and getting the communities around gold deposits to support the project by engaging their labour. The resistance to gold mining and exploration projects would reduce and compensation costs would be minimised. 

 

The situation here is not very different from what is in other African countries. The limited funding for the geological surveys in those countries aggravates the problem. 

 

Mugyenyi noted that Africa needs to solve the issue of financing the geological surveys, otherwise the continent will persistently not benefit from its minerals. 

 

He advised that intra-Africa trade, including trading in gold, should be promoted, instead of treating it as an illegal activity carried out through the porous borders. He argued that if informal cross-border trade is happening for commodities like rice and beans, why should it not happen to gold? 

 

"Gold jewellery should be made in Africa. We need responsible investments in the mineral sector. Uganda is not attracting investors in the gold sector because of the issue of land. We need a public and private engagement," Mugyenyi added. 

 

He advised that wealthy Ugandans need to start engaging in the exploration and production of minerals and not leave it to foreigners. 

 

 

Robert Kasande, the permanent secretary in the energy and mineral development ministry, said the government is creating a conducive environment for mining. 

 

"We need to harness mineral resources for value- addition, industrialisation, local content development and economic growth," Kasande said. 

 

He also concurred that community engagement is vital. 

 

Jerry Rhodes, the chairman advisory committee, the International Precious Metal Refiners (IPMR), noted that Africa has had a significant role in the global gold industry for over 130 years yet the IPMR is based in Abu Dhabi, United Arab Emirates. 

He proposed that Africa should form the Africa Precious Metal Association to represent and lobby for Africa's gold interests. 

 

"Africa's good delivery standard should be developed and adopted to suit Africa and not to do things the way it is done in Europe. In Africa, business is done through cash, in Europe it is through banks and credit cards," Rhodes said. 

 

He noted that the UK, UAE, and Switzerland do not have gold reserves and resources but have many refineries. He wondered why Africa, which has abundant gold resources, does not have many gold refineries. 

 

Rhodes urged Uganda's gold dealers to adopt the 10 principles of the UN Global Compact. The principles focus on the respect of human rights, labour rights at work, environment protection and anti-corruption. He said once these principles are followed, one cannot go wrong with the gold business. 

 

He recommended that Africa should come up with similar royalties, taxes and fees for gold because having different taxes and fees encourages a black market and smuggling. 

 

"Have similar taxes and fees in Africa like the EU block, it encourages investment and cross-border trade. I recommend the harmonisation of gold fees and royalties across the EAC and COMESA and support legitimate cross-border trade for gold and other precious metals," Rhodes said. 

 

He advised the local insurance to play a role to grow the gold industry. He also advised banks, high network individuals and private wealth managers to promote the purchase of value-added gold bars and coins refined in Africa as part of a currency and investment portfolio diversification strategy. 

 

"I urge Governments across Africa to encourage the development of a vibrant gold jewellery design and manufacturing sector that would ensure the continent retains as much value as possible from its gold," Rhodes said.