Billions in Smuggled African Gold Flow to UAE, US, and Europe: Report
A research report released on Thursday sheds light on a significant and troubling trend: the illicit removal of hundreds of tonnes of gold worth tens of billions of dollars from Africa over the past decade. This gold is predominantly ending up in the United Arab Emirates (UAE). Swissaid, a development aid and advocacy organization, conducted a comprehensive analysis revealing that in 2022 alone, 435 tonnes of gold—primarily sourced from small-scale miners—were smuggled out of Africa, totaling an estimated value of almost $30 billion.
The UAE has emerged as the principal destination for this illicit trade, receiving 405 tonnes of smuggled African gold in 2022, according to Swissaid’s findings. Over the preceding ten years, the UAE imported approximately 2,500 tonnes of illegally obtained gold, valued at over $115 billion. This massive flow of gold underscores the exponential growth of small-scale, or artisanal, mining into an industry that now involves millions of people, producing gold volumes that are comparable to, or even surpass, those of industrial mining operations.
In 2019, a Reuters investigation highlighted that billions of dollars’ worth of gold were being smuggled out of Africa annually through the UAE, which acts as a critical gateway to markets in Europe, the United States, and beyond. This investigation, along with Swissaid’s recent report, underscores concerns raised by governments and academics about the existence of a substantial parallel illicit economy. Such an economy is vulnerable to money laundering, terrorism financing, and sanctions evasion, in addition to causing significant losses in tax revenues for African nations.
One of the report’s authors, Marc Ummel, who is the commodities lead at Swissaid, pointed out that the UAE facilitates gold laundering. The country allows large quantities of smuggled gold to be legally recognized by passing through its processing channels. Swissaid’s analysis involved a meticulous comparison of aggregate gold exports from all African nations with gold imports into non-African countries. By cross-referencing these figures with data from trade associations, discussions with governments and refineries, and filling gaps in UN Comtrade data with country-specific statistics, Swissaid identified significant discrepancies.
The report also identified Switzerland and India as major importers of African gold. However, these countries did not exhibit the same discrepancies between declared imports and exports as seen in the UAE. According to Swissaid’s research, 12 African nations were implicated in the smuggling of at least 20 tonnes of gold annually.
The doubling of gold prices since 2009 has driven more individuals towards artisanal mining. Swissaid estimates that between 443 and 596 tonnes of gold were produced in 2022 by artisanal and small-scale miners in African countries. Alarmingly, over 70% of this gold production went unreported. In comparison, industrial miners have been producing approximately 500 tonnes of gold annually.
The report emphasizes that artisanal and small-scale informal mining constitutes the majority of African gold imports into the UAE. While millions of Africans rely on these mining activities for their livelihoods, these practices often have severe environmental and societal impacts. Artisanal mining is frequently associated with deforestation, water pollution, and hazardous working conditions. Moreover, the local communities do not see the economic benefits commensurate with the value of gold being extracted from their land, exacerbating poverty and social inequalities.
The findings of Swissaid’s report call for urgent international attention and action. There is a need for stronger regulatory frameworks and enforcement mechanisms to combat gold smuggling and ensure that the benefits of gold mining are equitably distributed. Additionally, there is a pressing need to support sustainable mining practices that protect both the environment and the well-being of local communities. This report serves as a stark reminder of the complex interplay between global markets and local realities, and the critical need for ethical sourcing and fair trade practices in the gold industry.