REUTER 11 MAR 2020
Adam Mugume, executive director in charge of research at the central Bank of Uganda, told Reuters the spike was due to a growing international demand for gold and a boost in Uganda’s refining capacity.
“There’s high demand for gold. Most people are moving away from currencies into gold holding,” he said. “So long as there’s demand for gold people will source for it from all over.”
Shipments of gold had been negligible for Uganda but they started to rise sharply after a major refiner, Africa Gold Refinery, opened shop in 2016.
Uganda’s gold shipments stood at under $10 million about decade ago, but in 2018 gold for the first time overtook coffee as Uganda’s biggest export.
Three more smaller refineries have since been commissioned, adding to the country’s processing capacity and allowing Uganda to slowly emerge as a regional gold trading hub despite low domestic production of the metal.
Mugume estimated Uganda’s own domestic gold production, mostly dominated by small-scale wildcat miners, at less than $50 million.
The four refineries source their gold from regional countries, including Democratic Republic of Congo, where rights activists previously blamed parts of the mineral trade for fuelling militia violence.
Mugume said last year’s jump in exports was also caused by the large consignment of gold that the African Gold Refinery imported from sanctions-hit Venezuela and subsequently re-exported. [nL8N21F6OK]
In the near term, Uganda is likely to continue recording large year-on-year increases in bullion exports as the country continues to grow as the region’s trading hub for the metal, he said.