Gold worth UGX11 trillion exported from Uganda without licences

The Auditor General, Edward Akol, has revealed that various exporters, exported gold valued at $3.014 billion (UGX11 trillion) in the 2023/24 financial year without obtaining the necessary export permits from the Minister of Energy & Mineral Development as required by Section 149 of the Mining and Minerals Act Cap. 159.

This practice, he says, undermines the regulatory framework and leads to loss of government revenue. Section 149 (1) of the Mining and Minerals Act, 2022, bars anyone from export any minerals from Uganda without an export permit while the law further in Section 149 (5) imposes a fine not exceeding She200M or imprisonment not exceeding 5years or both for this crime.

In his report for the 2023/24 Financial Year submitted to Parliament, the Auditor General also revealed that Uganda is missing out on revenue to a tune of Shs68.842Bn due to the accumulated unpaid export levies, while the mineral rent fees of Shs439Bn, which were due from exploration and mining companies, remained outstanding as of 30th June 2024, contrary to Section 50(1.b) of the Mining and Minerals Act Cap.159.

Section 180(4) of the Mining and Minerals Act Cap. 159, requires royalties to be distributed among the Central Government (70%), Local Governments (15%), Sub-County or Town Councils (10%), and owners or lawful occupiers of land subject to mineral rights (5%).

“I noted that the Mineral Royalties’ sharing fund account in MEMD received UGX.5.69Bn, in addition to the closing amount from the previous period of UGX.1.36Bn, adding up to UGX.7.05Bn. I noted that only UGX.3.14Bn (45%) was distributed to the beneficiaries, leaving an outstanding balance of UGX.3.91b,” Mr Akol said.

“The above weaknesses were attributed to inadequate enforcement of laws and weak collaboration, among key players.  

He advised the Accounting Officer of MEMD to Strengthen collaboration with the Uganda Revenue Authority to enhance the monitoring and enforcement of the export permit requirements; institute follow-up mechanism to monitor outstanding payments of mineral rent fees and strengthen enforcement for non-compliant license holders. Consider invoking the penalty clauses on culpable mineral exporters, in line with section 149(5) of the Mining and Mineral Act. And ensure that the bottlenecks leading to non-remittance of royalties are resolved so that the intended beneficiaries of the mineral royalties receive their due share.

While receiving the Auditor General’s Report for the financial year 2023/2024 on Wednesday, 15 January 2025, the Deputy Speaker, Thomas Tayebwa said that Parliament will soon take action against accounting officers who do not implement recommendations in the Auditor General’s report. 

“Accounting officers who have not taken action to implement recommendations of the Auditor General are going to face it rough with us during the budgeting process. We cannot continue sitting and making declarations and they are not implemented,” Tayebwa said.

He said that chairpersons of the sectoral committees will be guided on how to hold the officers accountable.  

Tayebwa also urged the Auditor General, Edward Akol to investigate and take action against alleged procurement of audit opinions in local governments. 
“We request you to fight that corruption. It is known in local councils where they say it openly during meetings that part of the money was used to pay for audit opinions. Let us give the audit function the serious attention it deserves,” he said.