New Report Unveils Gaps in Uganda’s Mining Legal Regime and Proposes Actionable Solutions to Combat Illicit Financial Flows along the Mineral Supply Chain

Posted on: 2025-02-04 10:41:06

ACODE and the Global Financial Integrity (GFI) have published a new research report titled “Uganda’s Mining Legal Regime: Addressing Illicit Financial Flows (IFFs) Risks and Revenue Loss in the Mineral Supply Chain.” This research looks at the pervasive enablers of IFFs within Uganda’s mineral supply chain, highlighting gaps and challenges undermining Uganda’s efforts to curb these practices.

The report identifies various enablers of IFFs in Uganda’s mineral supply chain, including informal mining, corruption, insufficient funding for regulatory bodies, misuse of trade-free zones, double taxation agreements, and limitations in mineral database management. These systemic challenges create an environment conducive to various types of illicit financial activities occurring along Uganda’s mineral supply chain, such as tax evasion and avoidance, illegal mineral exploitation, money laundering, smuggling, informal trade, and other forms of financial misconduct. Such activities deprive the country of essential revenue for development.

Additionally, the report also examines the challenges associated with the implementation of Uganda’s mineral legal framework in addressing these issues. Key obstacles include limited inter-agency cooperation, resource limitations within regulatory bodies, and an insufficient alignment between Uganda’s mining legislation and international best practices. The challenges have hindered Uganda’s ability to maximize revenue collection while ensuring sustainable governance of its mineral resources. “operationalization of the Mining and Minerals Act, 2022 by putting in place and enforcing the regulations is critical in mitigating illicit activities and revenue loss” Onesmus Mugyenyi, Research Fellow, ACODE. The report presents actionable recommendations to address these challenges by enhancing transparency, strengthening enforcement mechanisms, and promoting regional and international cooperation. Proposed measures encompass the implementation of enhanced regulations regarding mineral traceability, the augmentation of investment in capacity-building for oversight institutions, and the establishment of effective mechanisms for data sharing and coordination among the relevant agencies. “It is imperative to enhance Uganda’s mining legal framework to maximize the sector’s revenue potential while curbing illicit financial flows. Actionable recommendations are provided in our report to ensure that mineral wealth benefits all Ugandans. It is time to implement reforms to protect Uganda’s resources and future prosperity,” Philip Nyakundi, Policy Director, Global Financial Integrity.

This report is a call to action for policymakers, Civil Society Organizations, and industry stakeholders to prioritize reforms that can reduce IFFs risks and improve revenue collection from Uganda’s mineral wealth.