Billions of dollars’ worth of gold is being smuggled out of Africa every year through the United Arab Emirates in the Middle East – a gateway to markets in Europe, the United States and beyond – a Reuters analysis has found.
Customs data shows that the UAE imported $15.1 billion worth of gold from Africa in 2016, more than any other country and up from $1.3 billion in 2006. The total weight was 446 tonnes, in varying degrees of purity – up from 67 tonnes in 2006.
Much of the gold was not recorded in the exports of African states. Five trade economists interviewed by Reuters said this indicates large amounts of gold are leaving Africa with no taxes being paid to the states that produce them.
Previous reports and studies have highlighted the black-market trade in gold mined by people, including children, who have no ties to big business, and dig or pan for it with little official oversight. No-one can put an exact figure on the total value that is leaving Africa. But the Reuters analysis gives an estimate of the scale.
Reuters assessed the volume of the illicit trade by comparing total imports into the UAE with the exports declared by African states. Industrial mining firms in Africa told Reuters they did not send their gold to the UAE – indicating that its gold imports from Africa come from other, informal sources.
Informal methods of gold production, known in the industry as “artisanal” or small-scale mining, are growing globally. They have provided a livelihood to millions of Africans and help some make more money than they could dream of from traditional trades. But the methods leak chemicals into rocks, soil and rivers. And African governments such as Ghana, Tanzania and Zambia complain that gold is now being illegally produced and smuggled out of their countries on a vast scale, sometimes by criminal operations, and often at a high human and environmental cost.
Artisanal mining began as small-time ventures. But the “romantic” era of individual mining has given way to “large-scale and dangerous” operations run by foreign-controlled criminal syndicates, Ghana’s President Nana Akufo-Addo told a mining conference in February. Ghana is Africa’s second-largest gold producer.
Not everyone in the chain is breaking the law. Miners, some of them working legally, typically sell the gold to middlemen. The middlemen either fly the gold out directly or trade it across Africa’s porous borders, obscuring its origins before couriers carry it out of the continent, often in hand luggage.
For example, Democratic Republic of Congo (DRC) is a major gold producer but one whose official exports amount to a fraction of its estimated production: Most is smuggled into neighboring Uganda and Rwanda. “It is of course worrisome for us but we have very little leverage to stop it,” said Thierry Boliki, director of the CEEC, the Congolese government body that is meant to register, value and tax high-value minerals like gold.
The customs data provided by governments to Comtrade, a United Nations database, shows the UAE has been a prime destination for gold from many African states for some years. In 2015, China – the world’s biggest gold consumer – imported more gold from Africa than the UAE. But during 2016, the latest year for which data is available, the UAE imported almost double the value taken by China. With African gold imports worth $8.5 billion that year, China came a distant second. Switzerland, the world’s gold refining hub, came third with $7.5 billion worth.