A new report by Swissaid, a development aid and advocacy organization, paints a grim picture of Africa’s gold industry.
The report reveals a massive surge in gold smuggling, with hundreds of tonnes worth tens of billions of dollars illegally leaving the continent annually.
The primary destination for this smuggled gold? The United Arab Emirates (UAE).
Swissaid estimates that in 2022 alone, the UAE received a staggering 435 tonnes of smuggled gold, valued at over US$30 billion.
This trend has been escalating for a decade, with the UAE accumulating over 2,500 tonnes of smuggled African gold, with a total value exceeding US$115 billion.
The UAE claims to have implemented regulations to combat smuggling, but these claims are contradicted by the sheer volume of illicit gold entering the country.
Experts point to a significant discrepancy between Africa’s declared gold exports and the UAE’s reported gold imports. This discrepancy doesn’t exist with other major gold importers like Switzerland and India, raising serious questions about the effectiveness of the UAE’s regulations.
The report also highlights the rise of artisanal, or small-scale, mining in Africa. With gold prices doubling since 2009, millions of people have turned to this sector, producing volumes of gold rivaling or even surpassing industrial mining.
However, over 70% of this artisanal gold goes undeclared, feeding directly into the smuggling networks.
This large-scale smuggling has far-reaching consequences beyond lost tax revenue for African nations. Experts warn that it fosters a vast illegal economy vulnerable to money laundering, financing terrorism, and sanctions evasion.
The report further criticizes Swiss refineries for refusing to directly source gold from African artisanal miners while simultaneously importing heavily from the UAE, the known hub for smuggled African gold.
Swissaid argues that the UAE’s “inclusive approach” to the gold trade simply facilitates the laundering of illegally obtained gold. The report urges stricter regulations and improved transparency across the entire gold supply chain.
