Gold smuggled out of Nigeria is three times the country’s official recorded production, according to a recent study.
The study by SwissAid, a Swiss development organization, published in May, found that the amount of gold mined by artisans and smuggled out of Nigeria in 2022, was 15,000 kilogramme, while 5,000 kilogram was officially produced and sold.
Besides Nigeria, smuggled gold exceeded industrial gold production in several other African countries, including Niger, Sudan, and Mali.
The study showed that up to $35 billion worth of gold is illegally shipped out of the continent annually.
Each year up to 474 tons of gold mined by artisans (equivalent in weight to 23,700 cars) are smuggled out of Africa undeclared. At current market rates, this is valued between at $35 billion.
About 80 per cent of the shipments go to three countries – United Arab Emirate, Switzerland and India – with the UAE getting as much as 85 per cent, the report says.
“Gold that is smuggled out of Africa is mainly imported into the UAE,” Yvan Schulz, the study’s co-author, told Pluboard.
“The UAE serve as the main trading hub for that type of gold. That is partly because the Emirati customs conduct virtually no controls on gold imports; as long as these imports are declared at the border in the UAE, they allow the gold to enter the country.”
The underground trade deprives African nations of tax revenues that could be used for development. Between 2012 and 2022, the UAE received $115 billion worth of African gold not declared for export, the report says.
“We are talking about hundreds of millions of dollars for the whole continent that would be available for all kinds of public services including health and education,” Schulz says.
Zuzia Danielski, communications director at IMPACT, a Canadian non-profit that works to change how natural resources are managed in areas where security and human rights are at risk, said the findings confirm that real action is needed to address mineral smuggling from Africa.
“We call for stricter enforcement measures against known smugglers, private sector actors to undertake their due diligence obligations, and for states to enhance regulatory controls including authentication of origin and customs documents,” Danielski told Pluboard.
The Nigerian government said the study confirmed its concerns. “It is a statement of fact, and we are losing close to $9 billion to the activities of illegal miners, not just gold,” Mines Ministry spokesperson Olusegun Tomori said.
The government launched a new security unit in April, called Mining Marshals. “We are responding using a multipronged approach, including security, using technology and data,” Mr Tomori said.
Startling findings
The Organisation for Economic Cooperation and Development (OECD) says Africa loses vast amounts of minerals to smuggling every year, with the proceeds fuelling conflict, financing criminal networks, and facilitating corruption.
While many poor people in Africa rely on small-scale mining for income, these jobs can be dangerous and damage the environment. Especially risky is the use of mercury to extract gold, which harms both miners and communities.
The study says Mali and Zimbabwe have the biggest amounts of undeclared gold.
Determining the exact amount of minerals or revenue lost to smugglers in Africa each year is difficult. Previous studies compared export data reported by African countries with import data from receiving countries like the UAE, using a method called “mirror data analysis.”
SwissAid improved this model by addressing issues such as different trade systems, misclassification of tariff codes, and inconsistencies in trade value reporting.
“Getting in touch with state authorities in certain African countries and obtaining reliable data from them required tenacity,” Schulz said.
They made startling findings: way more gold is being smuggled out of Africa than previously thought; and some African states that produce a lot of gold barely have official exports, while others with little gold export a lot.
“This shows that strengthening legislation and increasing controls at the level of non-African importing countries, important as they are, are not enough to solve the problems that arise,” the report says.
More work also needs to be done in Africa itself, particularly at the national and regional levels, experts say.
“Stakeholders should act urgently to implement stronger anticorruption measures, bilateral and multilateral partnerships, and trade agreements,” said Ahmad Abdulsamad, program officer for Sub-Saharan Africa at Natural Resource Governance Institute.
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