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Coronavirus disrupts gold exports – Finance

FILE PHOTO: President Museveni inspecting gold at African Gold Refinery

Kampala, Uganda | THE INDEPENDENT | The monthly gold exports dropped to the lowest in March as coronavirus shutdown countries that consume most of Uganda’s gold.

According to the Finance Ministry, Uganda’s gold exports fell to 1,199 kilograms in March 2020 down from 1,955 kilograms exported in February. The volume exported in March is just half of what was shipped out in January 2020 which totaled to 2,097 kilograms of gold. United Arab Emirates is the biggest consumer of Uganda’s gold.

However, the Middle East country also closed some businesses as a measure to control the spread of coronavirus. The gold trade was disrupted too. Another hindrance has been the disruption of transport from the mines to the refinery. Uganda imports some of the gold that is refined in the country.

Restrictions on air travel meant a lot of this gold hasn’t been coming through. In terms of money, Uganda’s gold earnings in March dropped to levels last seen in January 2019. The country earned USD 61m (UGX 227B) in March 2020 down from USD 89m (UGX 331B) in February 2020.

This is far below what the country earned in March 2019 (USD 363M), the highest amount the country has even earned from its gold exports in a single month. President Yoweri Museveni used Thursday’s State of the Nation Address to sound lyrical of the country’s gold potential.

“We built a gold refinery at Entebbe. That gold refinery was and is still being fought by the neocolonial agents. We shall however defeat them” he said.  He said the refinery is earning US$1.3bn (4.8trillion shillings) per annum for the country.

“When I was trying to control the mining of gold in Uganda, I was opposed even by Members of Parliament. They do not want Uganda to have a gold refinery. Refineries do not belong to countries like Uganda. They should be in Dubai, South Africa, etc., but not in Uganda, according to these enemies,” he said.

Museveni said he would tell Lucy Nakyobe, the State house comptroller to use small innovation funds and ensure the country starts to “teach some of the grand-children the skills of jewelry. “The rich Ugandan ladies will be able to buy the gold jewelry made here instead of squandering money buying the same from distant sources,” he said.

Indeed, despite falls in exports in recent months as a result of coronavirus disruptions, Bank of Uganda shows the country’s gold prospects are looking good. In the April 2020 monetary policy report, the central bank said gold exports rose to USD$ 1.3bn in the twelve months to February 2020 from USD585.7M in the year before.

The country also imported gold worth USD 1.4Bn in the twelve months to February 2020 up from USD551.9 million, a year before. These numbers BoU said were supported by operation of an additional gold refinery.

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