Contribution of mining to GDP grows to 2.3 percent 

Gold mining in Moroto District in northern Uganda. Investors will no longer own 100 per cent stake in mining leases under the Mining and Minerals Policy, 2018. PHOTO | FILE | NMG

What you need to know:

At least or more than 90 percent of Uganda’s mineral sector is composed of artisanal miners, majority of whom are involved in mining metallic, industrial and building minerals components

Mining now contributes 2.3 percent to gross domestic product, according to State Minister for Planning Amos Lugoloobi.

The growth, Mr Lugoloobi says, has been inspired by reforms undertaken in the mineral sector in recent years.

In a speech read for him during a training organised for members of the Extractive Industries Transparency Initiative, Mr Lugoloobi said the contribution of mining to gross domestic product had grown from 1.1 percent in 2016 due to reforms, among which include online mineral licensing and biometric registration system of artisanal and small-scale miners.   

At least or more than 90 percent of Uganda’s mineral sector is composed of artisanal miners, majority of whom are involved in mining metallic, industrial and building minerals components.

Uganda joined the Extractive Industries Transparency Initiative in August 2020, becoming the 27th African country to join the setup of 56 countries globally that seek to promote transparency in mining and the extractives sector.

Uganda has in the last 10 years seen growth in mineral exports, which have become the country’s largest export.

For instance, according to Bank of Uganda, gold has for the last two years overtaken traditional exports such as coffee to become Uganda’s largest export commodity, contributing at least 44 percent of the export revenue.

Mr Moses Kaggwa, who doubles at the director of economic affairs in the Ministry of Finance and chairperson of the Extractive Industries Transparency Initiative stakeholders group, said Uganda has through a number of efforts improved its accountability and transparency in the management of extractives, which primarily include oil, gas and mining sectors.

“However, all of you know that abundance of mineral resources in a country does not necessarily translate into development and economic growth. Experience has shown that most countries that are rich in natural resources suffer server economic decline and underdevelopment resulting from mismanagement and poor governance of their extractive industries,” he said.

Proper planning       

According to Mr Kaggwa there is need to engage proper planning through which mineral wealth and revenues are managed to avoid experiences of “resource curse”. 

The Extractive Industries Transparency Initiative seeks to ensure that countries are accountable and transparent in the management of minerals along the value chain.

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