No gold exports were recorded in July, receipts drop by 51%

What you need to know:

  • Outperformed. Gold has in the past five years outperformed other export sectors with cumulative earnings hitting $1.7b (Shs6.3 trillion) for the period between December 2019 and November 2020. However, much of it are exports. 

Uganda did not export any gold in July, causing a massive drop in export receipts, according to Bank of Uganda. 

This was the first time in six-years Uganda had not exported gold, which is currently the country’s largest export. 

This, as a result, Bank of Uganda indicated, forced a 51 per cent drop in export receipts, which during the period declined to $300.39m (Shs1 trillion) compared to $455.44m (Shs1.6 trillion) in June. This was the lowest earnings Uganda had received from exports since May 2020, which stood at $290m due to Covid-19 related disruptions.  

Dr Adam Mugume, the Bank of Uganda director for research, confirmed the decline resulting from no gold exports, noting that dealers could have held back the exports due to tax related issues. 

“Yes, this arises from taxes on gold exports. Because of this, gold exporters are holding on until they finalise negotiations with the Ministry of Finance on the taxation issues,” Dr Mugume said. 

Government had in April proposed to introduce a $200 or Shs740, 000 for each exported kilogramme of gold. 

However, there are negotiations in regard to the matter. Daily Monitor could not readily establish progress of the discussions. 

Uganda has in the last five years seen a spike in gold exports, boosting export earnings over the period. 

According to data from Bank of Uganda, gold is now Uganda’s leading export commodity, contributing at least 44 per cent of total export volumes.

Initially, government, through the Department of Geology, had been levying a charge of 10 per cent of the value of exported precious metals, among them gold. Gold exports remain highly secretive and, apart from export volumes, little is known about the commodity.

Unrefined gold imports from both Tanzania and Zimbabwe have pushed the two countries into becoming some of Uganda’s largest trade partners, according to data from Bank of Uganda. 

For the first time trade between Uganda, Tanzania and Zimbabwe has stood out in decades with Uganda’s import from Tanzania doubling between April and June. 

In June, Uganda imported goods worth $125.12m (Shs444b) from Tanzania, which indicated a 43 per cent increase from $70.07m recorded in the same month last year.

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