Released by Swiss-based organization SWISSAID, a recent report has brought to light the extensive smuggling of gold from Zimbabwe to the United Arab Emirates (UAE), alongside other African nations. The document titled “On the Trail of African Gold: Quantifying Production and Trade to Combat Illicit Flows” offers an in-depth analysis of Africa’s significant role as the primary gold-producing continent. Yet, it reveals a striking contrast due to the yellow metal’s dual nature as both a critical revenue source and a catalyst for numerous negative consequences.
Africa heralded as the leading gold-producing continent, finds itself at a critical juncture where gold, while being a lifeline for millions of artisanal miners and a major governmental revenue source, also fuels armed conflicts and results in severe human rights abuses and environmental degradation. The precipitous rise in gold prices in recent years has only amplified the sector’s socio-economic impacts across African nations, including Zimbabwe.
In 2022 alone, the disparity between declared and undeclared gold by artisanal and small-scale miners (ASM) was stark, with only 24,000 kg of gold officially declared against an estimated 78,000 kg that remained undeclared. Zimbabwe ranks second only to Mali in terms of the volume of undeclared gold, leading the Southern African Development Community (SADC) region in this dubious distinction.
The UAE emerged as the predominant importer of African gold, purchasing 47% of the continent’s output, equivalent to 609,031 kg. This was followed by Switzerland and India, importing 267,535 kg and 162,364 kg, respectively. However, discrepancies abound in the reported figures, with the UAE’s declared imports significantly lower than the exports recorded by African nations, including Zimbabwe.
The complexities of the gold trade are further highlighted by the various routes and methodologies involved in smuggling operations. For instance, while some African gold directly reaches the UAE, a substantial amount is first smuggled to neighboring countries before reaching its final destination. This not only undermines the economic stability of the producing countries but also exacerbates legal and ethical issues in the trade of precious metals.
SWISSAID’s report underscores the need for rigorous and enhanced regulatory frameworks to manage the gold trade better and curb illicit flows that deprive African nations of vital economic resources. It calls for a stronger commitment from both governmental and industry actors towards fostering a responsible gold sector.
Moreover, the report delves into the broader implications of such unchecked activities, noting that several African government officials have acknowledged the problematic nature of gold smuggling. A notable example includes a Bloomberg article citing authorities from Sudan, Nigeria, DRC, Zimbabwe, Mali, Ghana, Burkina Faso, CAR, and Niger, who lament the annual loss of tons of gold, predominantly to Dubai.
In response to these challenges, some African countries have initiated dialogues and agreements with Emirati authorities, aiming to tighten controls and ensure more transparent and accountable gold trading practices. However, the path to reform is fraught with complexity, given the entrenched interests and the vast sums involved.
The SWISSAID report also criticizes the current approach of many African nations, which focuses predominantly on exporting raw materials without sufficient value addition or consideration of domestic needs and priorities. This strategy not only fails to leverage the full economic potential of the gold sector but also places African countries at a disadvantage in the global value chain.
The revelations from the SWISSAID report serve as a crucial call to action for all stakeholders involved in the African gold sector. It emphasizes the urgent need for comprehensive reforms and collaborative efforts to address the systemic issues of smuggling, under-declaration, and exploitation that plague the industry. As Africa continues to grapple with these challenges, the global community must also play a supportive role in ensuring a fair, transparent, and equitable trade in gold that benefits all parties involved.
Source: Newsday
