Ray of hope as gold lifts export earnings

Gold is Uganda's largest foreign exchange earner. Photo / File 

What you need to know:

  • Gold forms 44 percent of Uganda's export earnings 

Gold exports lifted up foreign exchange receipts in March and April, which could suggest an end to a long standoff between government and dealers over tax related issues. 

Data from Bank of Uganda indicates that during March, Uganda exported more than 4,647 kilogramme of gold, returning an export value of $268m. 

Exports continued into April with at least 3,399 kilogramme worth $200m exported in the month. 

However, no details have been provided to show the performance in May. 

The data also indicates that gold exports during March and April were higher than the average 2,400 kilogrammes exported before gold dealers suspended exportation of the commodity over a tax dispute in 2021.

Uganda had before the suspension, on average, exported gold worth $172.2m, making the commodity the country’s most valuable export. 

Last year, Bank of Uganda indicated that gold dealers had lifted the suspension, resuming exports  in June, which returned a value of 165.9m. 

However, there have been mixed trade data as government is yet to settle the tax dispute.  Gold had before the disruptions become Uganda’s largest single export, contributing at least 44 percent of total export earnings. 

Government had proposed a charge of $200 (Shs762,356) for every kilogramme of exported gold, which was later implemented.

However, this prompted gold dealers to suspend export of gold, citing introduction of an inconsiderate charge that would leave them counting losses. 

The exports in March and April lifted the country’s export earnings, which during the period rose to $681m in March and $538m in April. 

Dr Adam Mugume, the Bank of Uganda director for research, has previously indicated that Uganda’s export receipts had been impacted by the failure to register gold exports due to a tax-related dispute between government and dealers. 

However, government has been engaging gold dealers to come up with an agreeable levy.