Overview:
Industry experts and civil society groups are calling for urgent reforms to address the labor gap and transparency issues in Uganda's mining industry. With plans to increase annual mineral revenue to 750 billion shillings, stakeholders emphasize the need for predictable tax regimes and enhanced local technical education.
KAMPALA, Uganda — Uganda’s mining sector is facing a critical skills deficit that is forcing companies to recruit technical experts from neighboring countries, according to industry leaders and civil society organizations.
The shortage of local expertise was a primary concern discussed during a recent tax dialogue hosted by the Uganda Chamber of Energy and Minerals. Humphrey Asiimwe, the chamber’s chief executive officer, emphasized that the education sector must move quickly to develop required technical skills locally as the mining industry gains momentum.
The skills gap comes at a time when the National Development Plan IV has set ambitious targets to increase the sector’s contribution to GDP from 1.9 percent to 7.9 percent. The plan also aims to grow employment in the extractives industry from 1.6 million to 2 million Ugandans.
Beyond labor challenges, civil society groups are urging the government to improve transparency and ensure the timely distribution of mineral royalties. Under the Mining and Minerals Act 2022, 70 percent of royalties go to the central government, while 15 percent is allocated to local governments, 10 percent to town councils and 5 percent to landowners.
Lynn Gitu, an extractive governance specialist, noted that high license application fees of approximately 11.4 million shillings and the massive cost of Environmental and Social Impact Assessments remain major barriers. While regulatory fees are relatively low, hiring private consultants for these studies can cost more than $20,000, making formalization nearly impossible for artisanal and small-scale miners.
“A number of policy and implementation challenges continue to negatively affect the country’s mining sector,” Gitu said. She cited inconsistencies between mining and income tax laws as another factor complicating the industry’s growth.
Despite these hurdles, the government remains focused on value addition. The national plan seeks to raise investment in mineral value addition from 200 billion shillings to 1.85 trillion shillings, with a goal of reaching 750 billion shillings in annual mineral revenue.
Agnes Alaba, commissioner in the Department of Mines, said distinguishing between registered artisanal miners and those operating illegally is essential for proper regulation. She added that delays in licensing are often caused by documentation issues and a lack of awareness among local communities regarding when royalties are paid.