Massive Gold Smuggling from Africa to UAE Exposed, Valued at Up to $35 Billion Annually

A recent report by Swiss NGO Swissaid has uncovered a substantial gold smuggling operation from Africa, with the United Arab Emirates (UAE) emerging as a major hub for the illegal trade. The report estimates that between 321 to 474 tonnes of African gold, valued at $24-$35 billion, goes undeclared each year.

In 2022, Africa produced between 991 and 1,144 tonnes of gold, with over half coming from artisanal mines. More than 435 tonnes of gold were smuggled out of Africa in 2022 alone, with 66.5% of the UAE's gold imports from Africa being sourced through smuggling. This amounts to 405 tonnes of smuggled gold entering the UAE in that year.

Why this matters: The smuggling of African gold has severe consequences, including financing armed groups, serious human rights violations, and environmental degradation. If left unchecked, this illegal trade could continue to deprive African nations of much-needed tax revenues and hinder their economic development.

The gold is often transported to Dubai by plane, either in hand luggage or in the hold, on scheduled flights or private jets. From Dubai, the gold is mainly exported to Switzerland, which is the second-largest importer, and India. Under Swiss law, the last place where the gold is processed is considered its place of origin, making it difficult to trace the gold back to Africa.

Africa is the world's main gold-producing continent, with Ghana, South Africa, Mali, and Burkina Faso leading production in 2022. The smuggling of African gold has more than doubled between 2012 and 2022. The report highlights that gold smuggling has severe consequences, including financing armed groups, serious human rights violations, and environmental degradation.

Swissaid raw materials researcher Yvan Schulz commented on the impact of high export taxes, noting, "If you ask dealers to pay a 15% export tax, you can be almost certain that this gold is not going to be declared." The report also points to state administration and corruption as significant factors contributing to the trade of undeclared gold.

The shadow economy deprives African nations of tax revenues that could be invested in development. Schulz emphasized, "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." Adam Anthony, chairperson of the African steering Committee of Publish What You Pay, added, "$30 billion a year is equivalent to two times the GDP of Rwanda and the foreign reserves of Tanzania for the next six months."

The report recommends that African states harmonize their tax regimes to encourage declaration of gold exports and address corruption within state administrations. The UAE has implemented new regulations on gold and precious metals, but experts argue that more needs to be done to tackle the issue effectively.

Key Takeaways

• Between 321-474 tonnes of African gold, worth $24-$35 billion, goes undeclared each year.
• The UAE is a major hub for illegal gold trade, with 66.5% of its gold imports from Africa being smuggled.
• Gold smuggling finances armed groups, human rights violations, and environmental degradation in Africa.
• African nations lose hundreds of millions of dollars in tax revenues due to undeclared gold exports.
• Harmonizing tax regimes and addressing corruption can help tackle the illegal gold trade in Africa.