At least $35 billion worth of gold, mined by artisanal and small-scale operations in Africa, is hidden and smuggled out of the continent yearly, a new report reveals.
The report, by SwissAid, a Swiss development organization, quantifies the extensive gold smuggling network operating out of Africa, the world’s leading gold producer.
The study estimates that in 2022, a staggering 435 tonnes of gold were illicitly exported from the continent, primarily to the United Arab Emirates. That year, Africa’s gold production ranged between 991 tonnes and 1,144 tonnes, with over half sourced from artisanal mines. More than 435 tonnes of this gold were smuggled out, amounting to over a tonne per day.
Nine countries across Africa see over 20 tonnes of artisanal and small-scale mining (ASM) gold go undeclared annually. In 41 out of 54 African nations, ASM gold production exceeds 100kg per year, yet 15 countries report no production at all, the report notes. This hidden treasure accounts for up to 80% of ASM gold production and nearly 41% of Africa’s total gold output.
Nigeria also contributes to the illegal gold exports, although not as much as Mali and Zimbabwe.
UAE, Switzerland and India
The UAE is a major gold hub and a popular destination for gold smugglers. According to the report, approximately 66.5% of its gold imports from Africa in 2022 were obtained through smuggling. Between 2012 and 2022, 2,569 tonnes of African gold entered the UAE without being declared for export, representing a value of $115.3 billion.
This shadow economy deprives African nations of tax revenues that could be invested in development. Ironically, one reason for not declaring gold for export is the very high export tax, according to the researchers.
Switzerland also plays a crucial role in the gold trade network. Alongside the UAE and India, it is one of the top three importers of African gold. From 2012 to 2022, nearly 80% of African gold exports were destined for these three nations. Swiss direct gold imports from Africa increased from 158 tonnes in 2012 to 246 tonnes in 2022, the report noted.
The report highlights that even if Switzerland avoids sourcing ASM gold directly from Africa, it is possible for African gold to enter the Swiss market via the UAE.
“Switzerland is not directly sourcing ASM gold from Africa, but Switzerland is sourcing a lot of gold from the UAE,” says Yvan Schulz, Swissaid raw materials researcher and co-author of the study.
“Part of that gold very likely comes from Africa and from Africa’s ASM. So there’s a high risk that Switzerland might actually be sourcing a lot of ASM gold from Africa indirectly.”
Going on for decades
Illegal gold mining and trade have plagued Africa for years, with Mali and Zimbabwe being major sources. The rise in gold prices, reaching over $2,450 per ounce recently, has made this activity more lucrative.
Swissaid researchers analyzed gold production and trade data across Africa, comparing reported exports with imports by countries like the UAE. Their findings align with earlier reports, including a 2020 UN study that revealed over 1.1 tons of Congolese gold smuggled in 2019.
A UN investigation highlighted discrepancies between Uganda’s and its neighbors’ gold exports and official production figures, suggesting these countries are transit hubs for smuggled gold, likely from the Democratic Republic of Congo (DRC).
“Governments must no longer be able to hide behind the lack and poor quality of data and other information to justify their inaction; they must shoulder their responsibilities, in particular by stepping up controls and working to formalize the sector,” said Marc Ummel, head of the raw materials unit at SwissAid and co-author of the study.
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