Panellists at the 9th High-level Economic Growth Forum held at Kampala Serena Hotel last week
The Government of Uganda has been advised to register all artisanal miners and implement a traceability programme that will enable gold buyers trace the origin of all gold exported by Uganda in order to restore trust in the valuable mineral.
This is after questions swirled around the origin of Uganda’s gold with allegations that some of the gold is smuggled through Uganda from neighbouring countries especially Democratic Republic of Congo (DRC).
The appeal was made by Anna Nambooze, Country Director, TradeMark East Africa (Uganda and South Sudan), while making a presentation during the 9th High-level Economic Growth Forum held at Kampala Serena Hotel last week. The forum was organized by Ministry of Finance, Planning and Economic Development.
Nambooze noted, “We do realize that Uganda, we export gold, there are big mining companies but just as you see the business community, they are artisanal miners, so there is need to organise the sector, once we organise, come into associations, and work together, we are able to become more formal. So, a lot of support is needed for artisanal miners for gold, ore to be able to formalise, to be able to know the standards that are required to be able to have traceability.”
She added, “Right now if you go to some of these mines, they are using receipts but how will the final buyer from Europe know that this is coming from Uganda or this is coming from Nasser road. So, we need to have proper blockchain technology that is going to be able to trust where the gold is coming from. help the buyer to be able.”
Ramathan Ggoobi, Secretary to Treasury revealed that although Uganda has been able to diversity its exports in the past 15years by bringing on board 31 new products, there is need to improve the quality and value of exports Uganda is sending to the international market if the country is to achieve the tenfold economic growth goal of growing the economy to US$500Bn in the next 10-15 years.
“In the past 15 years, Uganda has added 31 new products to our export basket and these are increasingly becoming more complex exports. Amongst our peers in the region, we’ve added more new products than any other. However, much as we have been diversifying our economy, we need as a country to move from low-complexity exports to high-complexity exports. How do we do this? What kind of interventions can help us to grow more complex exports? And in particular, how do we foster structured execution of what we decided to do? I think this is the main challenge that we have and as the Ministry of Finance, we have set ourselves this as our task of getting the entire government, including ourselves, to improve execution discipline,” Ggoobi said.
According to research from Growth Lab at Harvard University, the high complexity products include; cars, computers, telephones while low complexity products exported by Uganda include; coffee, gold, tea, cocoa beans etc.
The Secretary to Treasury defended the need for Uganda to diversity its export products further noting, “We know that the global economy is switching from rules to deals, but our competitiveness is in our hands despite this interesting trend, moving from rules to deals. Some countries are saying, and these are the leaders of the global economy, they want deals, no more adhering to rules of managing the globalisation as we used to know them. So, the bottom line is, we need practical solutions and ideas for export development so that we can move Uganda to the high-complex exports.”
During her presentation on how Uganda can improve on its exports volumes in order to grow its economy, Nambooze urged Government to consider construction of more roads to complement the Kampala-Jinaj Highway and also improve on the infrastructure at Naivasha and have it as the main export port and end reliance on Mombasa port, citing the long distance which he says accounts for the 42% price hike for the products coming to Uganda.
She explained, “The cargo traffic has more than doubled over the last decade. Looking at where we are going, maybe by 2035, we anticipate that the population in East Africa (Uganda, Kenya, Tanzania) is going to be about 135 million people, and so the cargo volumes are going to really grow to about 56 million tonnes. Now, this volume is going through the same infrastructure that we had 10 years ago. We need more roads for traffic. But again, this is a high investment. The cost of getting these goods through to Uganda is about 42% of the final cost of these products to the market, it remains a very highly uncompetitive corridor compared to others in the world.”
“We are land linked and our export port majorly now is Mombasa and one of the recommendations we have is to bring the port closer to Naivasha. Naivasha has an internal container depot that has already been rehabilitated, it just needs again to some final works to ensure there’s more efficiency there. But just to explain it, right now, our trucks go over 1000 kilometres to Mombasa, that means for each trip, it’s about US$200 to US$300 for that cargo to go back and forth. So, this again increases the final cost. If we move to Naivasha, then we are going to reduce this cost by about half because it’s just over 500 kilometres from Kampala,” Nambooze added.
