For decades, Africa's gold industry was a dark world of deceit and greed as dealers of the mineral were seen as the mafia incarnate. Miners and traders, mostly from the mineral-rich Democratic Republic of Congo, would covertly meet to agree on the terms of the transaction.
The industry was shrouded in suspicion, and the playfield was not for the faint-hearted.
It was hard to know who was trading what and in what amounts.
The Uganda Bureau of Statistics (UBOS) hardly captured this trade. For example, in 2012, Uganda's gold exports totaled just $9.1 million, according to the Background to the Budget Report for the financial year 2016/2017, quoting figures from UBOS, even though there was hardly any gold production in the country. This money has since shot up to $1.25 billion as of 2019.
As a result, Uganda has managed to use these export earnings to shore up its foreign exchange reserves.
There are a number of reasons why gold export earnings have increased over the years. A fairly conducive policy environment is one of them. However, none has contributed to the growth of these export figures than the construction of gold refineries.
In 2010, a Russian-owned company, Victoria Gold Star, launched the first gold refinery in Uganda. The plan was to refine at least 60 kilos of gold per day. However, the company has failed to make a mark in the industry. Other smaller refineries have sprouted up.
But it was not until 2014, when Alain Goetz, a Belgian national who used to work in the region in the 1980s and 1990s, returned to the East African region and set up African Gold Refinery Limited (AGR) that Uganda started seeing its gold export fortunes turn around.
"AGR was founded to demonstrate the need for a transparent and credible system to add value to gold flows from Central and East Africa," Goetz told an Organisation for Economic Co-operation and Development (OECD) conference in France's capital Paris in May 2017.
That mindset is in line with an earlier 2015 OECD report that agreed with a "widely held view in Ugandan industry and government circles that since gold smuggling from the DRC cannot be stopped, ways should be found to encourage gold traders to work legally".
In just one year after setting up AGR in Entebbe, the value of Uganda's gold exports jumped to $312 million in 2016 and in 2019 the amount crossed the billion-dollar mark.
There has been public debate on how Uganda, which barely produces sizable amounts of gold, can export huge volumes and earn such amounts. That is simple; previously, a lot of gold traders were exporting their undeclared product until they figured out that they can do the same through a formal setting such as through a refinery.
All this is thanks to Goetz's aggressive drive to create a semblance of discipline in the gold sector.
Goetz has a single formula: to refine the gold up to the international standard of 999.9 or 995.0 purity. At AGR, dealers with proper certified paperwork bring in their gold for refining, melting, assaying and logistics. In doing so, AGR has gone a long way in streamlining the processes in Uganda's gold industry.
"The most important thing is that we introduce transparency not only in Uganda but in the entire region. The team is still working hard to map the gold flow and combat smuggling networks. I think I have already laid a foundation at this point. The team can continue to extend the certification mechanism," Goetz said in an earlier interview.
Due to Goetz setting up arguably the biggest gold refinery in East Africa, many traders have come to the country to formally conduct business with the company.
The refinery has created employment opportunities for Ugandans and promoted their high-finished kilo bars to the international market as Ugandan products.
During his state of the nation address in June, President Yoweri Museveni offered his full support for the refinery, promising to defeat those who oppose it. "When I was trying to control the mining of gold in Uganda, I was opposed even by Members of Parliament," he said.
"Now that gold is being refined here, [we] should start to teach some of the grand-children the skills of jewelry," Museveni added, referring to AGR. "The rich Ugandan ladies will be able to buy the gold jewelry made here instead of squandering money buying the same from distant sources."
Goetz has since left Uganda but his legacy is going strong. Indeed, Uganda has just signed up to the Extractive Industries Transparency Initiative, a standard that requires countries to publish financial information from their oil and gas industries. EITI helps the public to monitor many transactions in the oil and gas industry.
There is no doubt that Goetz laid the stage for transparency in the mining sector.
Before he left Uganda in 2018, he had planned to put collection centres for gold in a number of gold mining districts in the country. If his dream can be achieved, Uganda would have more credible data on its gold production, which would be another huge step in understanding the industry and attracting investors.
Over the recent years, the international community has developed dozens of resolutions and passed huge amounts of budget for the traceability and transparency of gold and other precious metals, particularly in the East African region, yet remain unsuccessful.
It is worth mentioning that AGR, through its private funds and initiative, demonstrate their commitment to sustainability by providing the complete traceability, aiding transparency to the gold industry and ensuring ethical practices along its value chain.