The gold, according to sources, belongs to a Tanzania-based gold dealer.
Smuggling. The Police Mineral Protection Unit is reported to have intercepted 93kg of gold worth nearly $5m (about sh18.5b) that reportedly was being smuggled out of the country through Entebbe airport on the night of June 17, busting a ring that was going to cost the country over sh1b in tax revenue.
Sources say the gold was sneaked into Uganda through the Tanzanian border post of Mutukula, right up to Entebbe airport, with the help of a racket of some government workers. It is understood the Police mineral protection unit was tipped off by some anonymous sources, before carrying out the operation.
The gold, according to sources, belongs to Amit Rajnikant Gandecha, a gold dealer based in Tanzania, who is said to have used Uganda as a conduit for smuggled gold for some time.
Documents indicate that Gandecha exports most of his gold through Entebbe airport to the United Arab Emirates (UAE). The gold enters Uganda mainly by road.
An attempt to reach out to Jessica Keigomba, the head of the Police Mineral Protection Unit, for a comment on phone was futile. Another top official at the same unit could neither confirm nor deny the events of the June 17 raid.
However, independent sources who work at Entebbe airport confirmed that the gold was seized. One source says the gold, which was bound on an Emirates cargo plane, is currently in police custody at the airport.
Uganda’s economy is desperate for a cash injection as a result of the effects of a stringent lockdown from the fight against the spread of the coronavirus. Many businesses remain closed, while those that are open are fighting to stay afloat. To turn this situation around, Uganda needs tax revenue to prop up the economy. However, smuggling of different items such as gold remains a thorn in government’s efforts to raise the much needed tax revenue.
A number of refineries, with very low investments, have set up shop in Uganda after acquiring their dealers’ licenses under reprobate ways. These refineries, whose structures and operational standards are opaque, have facilitated gold smuggling by consistently trading with smugglers. Bigger gold refineries, with large investments, have instead suffered at the hands of these smaller refineries due to the unfair business competition.
During his State of the Nation Address in early June, President Yoweri Museveni was vocal in his support for the establishment of a large refinery in Uganda. Without naming which refinery it is, he said the gold refinery “will be defended by all the policy instruments”. The President said the refinery is earning Uganda $1.2b (about sh4.4 trillion) per year.
Some smaller refineries, however, export about 1,000kg of smuggled gold out of Entebbe airport, with an export value of more than $40m (about sh148b), leaving the country missing out on billions of shillings in tax revenue – if a conservative tax rate of six per cent is applied.
Gold has become a top commodity export for Uganda, even surpassing traditional exports such as coffee. According to official figures, Uganda exported $1.25b (about sh4.7 trillion) worth of gold in 2019, compared to $514.8m (about sh1.9 trillion) in 2018. However, the country does not mine as much amount of gold, which means that a lot of the mineral is re-exported as Ugandan gold.
Gandecha is one of those gold dealers said to have a strong footprint into Uganda, usually trading under his name, and not as a company. According to one of his export permits, issued by the Tanzanian government, he gets his gold from Geita, in the country’s northwest.
From Geita, an area where AngloGold Ashanti has a flagship mine, Gandecha moves the gold to the border post of Buloba and Mutukula, where he works with some people from the revenue authorities to have his product cross the border. Here, sources say, he under-declares the amount of his gold.
At Entebbe airport, he reportedly also works with different officials to have the gold go through the security points. One of the common ways of how gold is smuggled out of the airport is when it is declared as hand luggage.
In the past, local media noted how a United Nations Security Council report into the Democratic Republic of Congo detailed how smuggled gold bars were being loaded onto aircrafts as hand luggage. The report named Entebbe airport as a key transit point for this smuggled gold.
The owners of this gold usually buy a ticket for a seat on the aircraft, where some gold is placed and another kept in the overhead cabin as part of hand luggage.
Such smuggling of gold continues to frustrate President Museveni’s efforts of seeing to it that Uganda adds value to its products. At some point, Museveni instituted a ban on the exportation of raw minerals.
Due to the exportation of raw minerals, a sizeable amount of which is smuggled out of the country, Uganda is missing out on the opportunity to create jobs for its huge youth population.
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