Gold is second largest export

Tuesday October 11 2016

By Mark Keith Muhumuza

Gold is now Uganda’s second largest export commodity after coffee, after posting historical highs in the last three-quarters of the financial year 2015/16.
According to the Bank of Uganda’s (BoU) 2015/16 annual report, the gold exports value during the financial year rose to $204m (Shs693b) from a paltry $230,000 (Shs782m) in the 2014/15 financial year.
This is the highest value of gold exports Uganda has released since 1997/1998. In fact, the last time gold export values were this high was in 2006/07 financial year at $116m (Shs394b) but then fish export values were in second place, with coffee remaining in the lead.
According to Dr Adam Mugume, the director of research at BoU, they’re yet to determine why gold exports expanded at a much higher rate than any other export.
“One of the reasons is the establishment of firms that process gold in Uganda. This formalised gold operations. Instead of taking gold to Nairobi in raw form, moreover unrecorded or smuggled, both Gold from Uganda and DRC are processed in Uganda and exported,” he told the Daily Monitor in an email. He, however, emphasises that the research department at BoU was still trying to ascertain the source of the exported gold.

Volume of exports
At least 5,423 kilogrammes of gold were exported through Uganda. Value addition is currently being done by the latest gold refinery in Uganda. The Africa Gold Refinery, located in Entebbe, officially unveiled its presence in the country at last week’s 5th Mineral Wealth Conference.
“Because of the good investment opportunity, we have just registered a state of the art gold refinery in the country. This has been put up by a private investor. This is the next gold refinery in Africa after South Africa. It has the capacity to produce 200kgs per day in a double shift,” said Mr Edwards Katto, commissioner, Directorate of Geological Survey and Mines (DGSM) at the conference.

The company revealed that it can produce gold bars to about 99.9 per cent purity. It also produces small minted bars. The $20m (Shs68b) investment will be sourcing gold from places like Mubende and Buhweju among others. It is also buying raw gold from DRC and Tanzania.
Refined gold products fetch a higher value when exported than the unprocessed gold.
The company is able to source gold from several sources because it enjoys a 10-year tax holiday from the government for adding value to Uganda’s gold. This is an exemption granted to companies that add value on minerals in Uganda before exporting them.

Value of exports

Commodity 2014/15 2015/16
Coffee $400.49m $351.90m
Gold $0.23m $204.26m
Oil re-exports $143.33m $122.52m
Fish $136.82m $114.65m
Tobacco $63.22m $88.60m
Maize $74.19m $79.83m
Tea $73.37m $74.79m