By KT Reporter
Fool’s Gold Taints Uganda’s Mineral Sector Escalating cases of god scams are undermining revenue collection as well as investments in the mining sector says one of the energy and mining policy experts in country.
Bwesigye Don Binyina, the Executive Director of the African Centre for Energy and Mineral Policy (ACEMP) says the gold scammers have earned Uganda a bad name in the mineral market. He says they have become a major threat to individuals seeking to buy gold from Uganda.
The scammers entice gold buyers with huge amounts of gold at rates far below the prevailing rates.
According to the Ministry of Finance , Mining currently contributes 1.4% of GDP (FY 2021/22) but has
high potential for growth.
Binyina says the scams seem to be driven by the current high demand of gold around the world. A kilogram of gold shot up from about $55,000 to $97,000.
The sharp rise according to Binyina was driven by the Russian invasion of Ukraine. “Some guys got I touch with me an we went on a hunting expedition, I told them that if you want gold in Uganda, forget about it” he said.
Buyers have rushing to gold as trade tensions, US tariff policies, and global uncertainties drive demand for gold.
He warns prospective gold buyer to take causation especially when some dealers promise to provided huge volumes of gold.
“Trust me. I have been in this area for quite some time. I know whoever is doing what they are doing. Anyone who tells you that they are looking for 20 kilograms, 30 kilograms. And they have cash, simply tell them get your cash and go back where they came from” he urged.
Accruing to Binyina, the scammers tend to dupe the unsuspecting gold buyers. “They use iron ore or copper. Because the two look alike. They gives you iron ore coated with copper because the two look alike. They get these things, slice them properly, and put them in boxes. There is always a muzungu or an Indian or a brown looking person around” he revealed.
While African Centre for Energy and Mineral Policy (ACEMP) has not documented the number of scams, Binyina told URN that they are definitely common.
The scammers tend to be connected to top security personnel. Lawyers in Kampala have equally implicated in the crime. Some of the suspects in were successfully prosecuted in court. One of cases involved Ethiopian nationals, WG Dessie, and his friend Abebe Belay Engda who were enticed to pay USD 1, 9OO, OOO in a fake gold scam.
The criminals who included a South Sudanese national, Malong Lawrence Lual, Okita Lunyo Lota Mike, Gavana Titta, Deus Zikusooka aka James Byaruhanga In July 2021, a Ugandan anti-corruption found the three guilty of defrauding WG Dessie of $1.9 million in an elaborate fake-gold scam, obtaining money and creating false documentation for consignments of gold that never materialized.
The Global Initiative Against Transnational Organized Crime (GI-TOC) in 2019 said that the informal nature of their gold industries in Uganda and Kenya has made them magnets to criminal actors ready to use corruption, financial leverage and violence to turn a profit. It further stated that Kenya and Uganda play complementary roles in the scams.
“Whereas Kampala acts as an operations base for criminal networks, Nairobi – as the major regional communications and financial hub – is the centre of the financial transactions in these scams” GI-TOC stated.
The scammers or fraudsters come from as far as South Africa, the DRC and South Sudan. The Global Initiative Against Transnational Organized Crime (GI-TOC) said Gold scammers in East Africa tend to target foreign investors (from as far away as Malaysia, India, Dubai, Ukraine, Korea and the UAE), offering them gold at very low prices.
GI-TOC’s review of major cases reported by law enforcement in Kenya and Uganda between the beginning of 2021 and the beginning of March 2022 shows that defrauded investors lost an estimated US$25 million in a total of 18 incidents.
In one case from 2020, a DRC national, arraigned in a Nairobi court in January 2022, was accused of defrauding a Ukrainian of US$8.32 million in 2020, an amount equivalent to 136% of the value of Kenya’s total gold production-URN. Give us feedback on this story through our email: kamwokyatimes@gmail.com
