Co-Authors Say Report on Smuggling of African Gold is Just the First Step

The 140-page report titled, “On the Trail of African Gold,” deals with extensively sourced numbers, presented in clear language and easily understandable graphs. In its third chapter, for example, the report lays out the trend of undeclared gold produced through artisanal and small-scale mining across several countries. That’s generally contrasted with the declared gold production. The correlations are laid out, like how the declared gold production drops sharply in Ghana, Sudan and South Africa.

“A comparison of the data reveals that between 32 [percent] and 41 [percent] of the total gold produced in Africa was not declared at the production stage in 2022,” Schulz and Ummel state in their report. Covering all 54 African countries for a period of over 10 years, the commercial value of the gold smuggled from the continent in 2022 alone, is somewhere between $24 billion and $35 billion.

A lot of it is due to the exploitative nature of mining across a significant portion of Africa, fueled by factors like armed conflict, deeply entrenched government corruption, and a general lack of transparency.

“The fact that a great part of the trade in African gold is opaque is regrettable, because it is conducive to human rights violations and the financing of armed conflicts, among other problems,” Schulz and Ummel tell OkayAfrica. “With increased levels of transparency in the African gold sector, we can achieve better traceability and real accountability of private and state actors. And that is bound to have a positive impact on the ground, for the miners, their families and the mining communities at large.”

The SWISSAID report comes with recommendations on how to reduce the smuggling of gold, including but not limited to harmonizing taxes, enforcing tighter regulations, and formalizing artisanal and small-scale gold mining, as it accounts for the majority of gold being smuggled. However, that depends on the readiness of governments, and it would be fool’s gold to believe most governments will react properly, if at all.

In gathering data, Schulz and Ummel had to wade through inconsistencies in official statistics, from the same country on more than a handful of occasions. As stated in the report, South Africa, Nigeria, Guinea and Mali were amongst several countries where figures didn’t tally between local government agencies, with differences reaching several tonnes in some instances.

“Data quality was lacking in many cases, so we had to find ways to correct it so as to be able to use it anyway,” the co-authors say. “This was all done to make sure our total figures were relevant and we – and others – could draw conclusions from them.”

So far, the report has drawn global attention, but the lack of reactions from the governments of United Arab Emirates, Switzerland and India is conspicuous, seeing the three countries are the landing spot of 80 percent of Africa’s gold, with over 47 percent going to the UAE alone, according to the report. It adds that in 2022, 405 tons of gold, which account for 66.5 percent of the gold imported into the UAE from Africa, was smuggled, stating that, “between 2012 and 2022, 2,569 [tons] of African gold imported into the UAE was not declared for export in African countries.” This accounts for $115.3 billion when you calculate the average price of gold over these eleven years, the report states.

Even on the continent, governments are yet to acknowledge the report or publicly announce plans to foster a more transparent gold production and trading market.

For Schulz and Ummel, this is primarily a first step, albeit a very big one, in ensuring that the clarity from their reports better informs Africans and the entire world, in hopes that positive change follows after. “We expect that more people in Africa will react to our research as we release our country-specific analyses on a dedicated website from July 2024 onwards.”