Pervasive corruption in Uganda’s mining sector allows crooked officials and the investors they partner with to profit at the expense of the country’s economy, people and environment, a London-based Global Witness reveals in a report.
An 18-month investigation shows it is almost impossible to do business in the mining sector without paying bribes or drawing on high-level political connections.
‘Uganda: Undermined’ exposes how well connected individuals including those with close ties to President Museveni appear to trade political influence for financial gain. From low-level officials to senior political figures, many of those involved in the sector are ready to bend or break the rules. Fixers and middlemen run a parallel economy which sits outside the system, selling off mining rights all over Uganda in deals facilitated by mining department staff. Serious investors are driven away, while some of those left are the last people who should be involved in the mining industry.
The report singled out Directorate of Geological Survey and Mines (DGSM) that is responsible for awarding licenses to companies that powerful individuals are compromising it thus threatening its independence and credibility.
“…rather than fulfilling its mandate to work for the benefit of the Ugandan people, the DGSM is controlled by a hidden alternative power structure and decision making process or ‘shadow system’ which benefits predatory investors and politically powerful Ugandans,” the report reads in a part.
The report named particular individuals who benefited from nepotism and connections both to Directorate of Geological Survey and Mines and the first family.
Richard Kaijuka, a former Minister of Energy and childhood friend of President Museveni owns gold exploration licenses across Uganda and they stretch to the border of Uganda and Congo through African Gold Refinery (AGR) Company, which he co-owns with a Belgian investor.
Kaijuka, also the vice chairperson of the Chambers of mines and Petroleum, was also found to be friends with Salim Saleh, the president’s brother and Barnabas Taremwa who is a brother-in-law to Saleh.
The report states that in one of many examples of legal but exploitative tax avoidance, African Gold Refinery (AGR), whose employees have close links to the president, declared exports of gold worth over US$200 million but paid only half a million dollars in tax. A former employee with connections to the President of Uganda revealed how he helped arrange the tax exemptions for the company, which is processing gold from across the region, including South Sudan and DRC. The company has failed to disclose the origin of the gold or provide evidence of supply chain due diligence, raising concerns that this gold could be fuelling conflict and human rights abuses.
“Uganda is at a crossroads: managed properly, its mineral wealth could create jobs and generate much needed revenues. But if this level of corruption and mismanagement is allowed to persist, only political elites and the corrupt will profit. Meanwhile Ugandans continue to lose land and livelihoods, reputable companies hold back investment and the environment suffers,” said George Boden, Campaign Leader, Global Witnesses.
Other areas of concerns include; Miners, including children, work in dangerous and largely unregulated conditions and are exposed to toxic substances like mercury every day. Poorly dug mine shafts collapse regularly, causing death and serious injury.
Also, mining rights are routinely granted to people or companies with no qualification to exploit them. For example, African Panther Resources gained control of a tin mining concession in South Western Uganda while owned and directed by two twenty-somethings from London with no apparent experience of mining. They were awarded an exploration licence for the site in just three days, a turnaround which one Department of Geological Survey and Mines (DGSM) employee described to Global Witness as “impossible.” The company was only in their hands for seven months. Before and after that period the company was controlled by Christopher Eibl, CEO of the major international Swiss commodities investor Tiberius Asset Management, and his business partners. The changes in ownership appear to be a clear attempt to hide their identity during the period in which the company received its licence.
Section 43 (3) (a) of the mining act stipulates that “no mining lease shall be granted to an applicant unless he or she satisfies the Commissioner that, “the area of land over which the lease is sought is not in excess of the area reasonably required to carry out the applicant’s programme of the proposed operations.”
“The absence of respect for the rule of law and the systematic circumvention of policies and procedures undermines investment,” reads the report titled ‘Uganda: Undermined’ https://www.globalwitness.org/en/campaigns/oil-gas-and-mining/uganda-undermined/
On the other hand, the report also observed “since the early 2010s, Uganda has also experienced its own domestic gold rush, concentrated around Mubende, Mayuge, Namayingo, Bugiri and Karamoja with tens of thousands of Ugandans flocking to mostly unlicensed, artisanal mines in search of a living.”
Potential lucrative Venture
Between 2009 and 2015, Uganda’s annual gold exports stood at $40M, according to Bank of Uganda statistics. But the figure swelled to whopping $340M by 2016, which offers hope for the speedy growth of the mining sector.
Statement: The Energy Sector Strategy 2024–2028 Must Mark the End of the EBRD’s Support to Fossil Fuels
The European Bank for Reconstruction and Development (EBRD) is due to publish a new Energy Sector Strategy before the end of 2023. A total of 130 civil society organizations from over 40 countries have released a statement calling on the EBRD to end finance for all fossil fuels, including gas.
From 2018 to 2021, the EBRD invested EUR 2.9 billion in the fossil energy sector, with the majority of this support going to gas. This makes it the third biggest funder of fossil fuels among all multilateral development banks, behind the World Bank Group and the Islamic Development Bank.
The EBRD has already excluded coal and upstream oil and gas fields from its financing. The draft Energy Sector Strategy further excludes oil transportation and oil-fired electricity generation. However, the draft strategy would continue to allow some investment in new fossil gas pipelines and other transportation infrastructure, as well as gas power generation and heating.
In the statement, the civil society organizations point out that any new support to gas risks locking in outdated energy infrastructure in places that need investments in clean energy the most. At the same time, they highlight, ending support to fossil gas is necessary, not only for climate security, but also for ensuring energy security, since continued investment in gas exposes countries of operation to high and volatile energy prices that can have a severe impact on their ability to reach development targets. Moreover, they underscore that supporting new gas transportation infrastructure is not a solution to the current energy crisis, given that new infrastructure would not come online for several years, well after the crisis has passed.
The signatories of the statement call on the EBRD to amend the Energy Sector Strategy to
- fully exclude new investments in midstream and downstream gas projects;
- avoid loopholes involving the use of unproven or uneconomic technologies, as well as aspirational but meaningless mitigation measures such as “CCS-readiness”; and
- strengthen the requirements for financial intermediaries where the intended nature of the sub-transactions is not known to exclude fossil fuel finance across the entire value chain.
Download the statement: https://www.iisd.org/system/files/2023-09/ngo-statement-on-energy-sector-strategy-2024-2028.pdf
The Corporate Capture of African Agriculture
Produced by Rosa Luxemburg Foundation in partnership with the Alliance for Food Sovereignty in Africa, Biowatch South Africa, and PELUM Tanzania. This episode will expose the alarming reality of how multinational corporations are influencing Africa’s agricultural future.
In many African communities, women have traditionally held control over agriculture. This episode lays bare the danger posed by the potential loss of this power to corporate interests, a situation which could precipitate widespread hunger. Women are highlighted as the stalwarts preserving the rich traditions of African farming, and their displacement from this role is likened to an existential threat.
The episode shines a spotlight on AGRA (Alliance for a Green Revolution in Africa), launched in 2006, primarily funded by the Bill and Melinda Gates Foundation. It was envisioned as a mechanism to halve hunger in 20 African nations and double the income and yields of over 30 million small-scale farmers by 2020. However, instead of delivering on its promises, it appears that hunger has actually escalated by 30% in these countries.
We dissect the underlying flaws in AGRA’s model, arguing that AGRA’s narrative, epitomizes the failure of the so-called “Green Revolution.” The approach emphasizes a narrow concept of productivity, focused on yield enhancement for a limited number of grain types. This methodology overlooks centuries-old farming practices, wisdom and resilience strategies that African farmers have depended on.
Governments, absorbed by this narrative, have established laws and policies that champion this skewed vision of agricultural productivity, promoting the use of “approved” seeds, which must meet strict formal criteria. Traditional farmers’ seeds are ignored and sidelined, leading to a distorted perspective of what truly constitutes a seed.
The focus on profit over people leads to an emphasis on high-value crops, such as maize. The involvement of foreign entities and their seeds bring with them an increasing dependency on these external factors, essentially eroding the sovereignty of the African nations over their seed stock. This state of affairs is likened to a form of neo-colonialism.
Our collective knowledge about seeds, cultivated over centuries, risks being entirely wiped out, and farmers are effectively being marginised. They’re reduced to mere consumers, alienated from the intimate understanding and respect for the seeds they cultivate. This episode urges the empowerment of farmers as a crucial step to breaking free from the corporate dominance over African agriculture.
This episode is a rallying cry to protect these seeds, our traditions, and our sovereignty. When all else fails, our traditional systems, currently sidelined, will be our beacon of hope and our means of survival.
Watch the clip on our YouTube channel and become part of the struggle to resist the corporate takeover of African food systems.
Watch the full video here: The Corporate Capture of African Agriculture
Innovative Finance from Canada projects positive impact on local communities.
In this video Witness Radio Uganda and GRAIN express pessimism on why development finance from Canada may not be different from other financiers.
Witness Radio Uganda’s Team Leader Jeff Wokulira Ssebagala and GRAIN’s researcher Devlin Kuyek share views on the adverse effects of harmful financing and developments world Wide in an interview with the Co-founder of the Blended Finance Critique Susan Spronk, a Canadian based coalition of civil society organizations, unions and academics that condemns the operations of Blended Finance in Canadian Aid.
According to the Organization for Economic Co-operation and Development (OECD), Blended finance is the strategic use of development finance for the mobilization of additional finance towards sustainable development in developing countries. The Canadian government is widely promoting blended financing as a form of privatization to meet the United Nations’ 2030 Sustainable Development Goals (SDGs).
But civil societies such as Susan’s urge it (blended finance) undermines Canada’s ability to meet its commitments to the established goals of Official Development Assistance (ODA), namely poverty reduction, a central focus of the SDGs.
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