BUSINESS: Refinery offers golden opportunity

There have been reports that dealers smuggle gold from neighboring countries of Democratic Republic of Congo and Tanzania. However, there has been an increase in the number of big multinational businesses coming in during the past few years, a key indicator that the sector has potential to boost the performance of Uganda’s economy.

AGR officials said they are sourcing gold from around the Great Lakes Region before they export it as 99.99% purified to the Middle East and Europe.

Goetz said they are in the process of getting a mineral dealer license in Uganda to deepen their sector operations.

“I am not supposed to tell you where gold comes from…government should tell you,” he told journalists on the sidelines of the launch event.

At the launch of the AGR, among other dignitaries, senior officials from the Democratic Republic of Congo and Tanzania, and diplomatic and commercial representatives from across Africa, the Middle East and Europe were present.  This signals wider interest in Uganda’s gold refinery and related activities across the globe.

Goetz said that the opening of the refinery would enhance transparency in the gold industry in addition to checking illegal gold trafficking of the mineral.

Museveni on the other hand said government would remove local taxes (royalty) as an incentive to attract gold miners to the AGR.

“We have removed the taxes on gold; so miners from Mubende, Busia and Buhweju should bring their gold to AGR instead of smuggling it out…Africa is bleeding because of the stupidity of wrong taxes,” he said, adding Uganda needed to look up to the gains attained by countries like United Arab Emirates that has 14 gold refineries and is a tax free zone.

“It is our right to add value to our own resources,” he said.

Museveni also promised to deal swiftly with smugglers particularly those that do it through the hand luggage on airlines.

Goetz said prior to sinking cash in the refinery, they had background information regarding many controversial issues surrounding the regional gold trade. He added that transparency in the gold sector is paramount to the future success of a strong industry in Uganda and the region. Commenting on smuggling, he said, the practice is bad, poses unfair competition, causes tax and job losses and that it should be prevented.

“We are working very closely with our local and international partners to address these issues,” he said.

Urgent policy interventions 

Officials at the Africa Centre for Energy and Minerals (ACEMP) say apart from gold, the entire mineral sector in Uganda needs urgent attention.

“The rising exports of gold needs to be investigated,” Don Binyina, the ACEMP Executive Director told The Independent, “We are losing a lot of money as a country because we have not done our job right.”

Binyina said areas to be strengthened include tax administration, documentation of all gold miners, and scrutiny of their applications. Binyina said Uganda could copy what other countries like Tanzania and Ghana did and put in place a specialised government body to monitor, audit, advise, sell, buy gold and engage all stakeholders in the mining sector. All transactions and money involved would be managed by the central bank and directed towards areas of inclusive economic growth. He said there has to be commitment from government for this to happen.

“Government knows what to do but they are not doing it,” he said.

According to him, the mining sector in Uganda employs over 400, 000 people directly and over two million indirectly.

Meanwhile, after launching the AGR, President Museveni was the only public servant gifted with one ounce (31.1 grams of gold).

“Right now my worth is more by Shs4.4 million,” Museveni said after receiving the ounce, amidst applause from the audience.