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Monday 24 February 2014

Smuggling losses hamper DRC growth

Gold worth at least US$ 400-million dollars was smuggled out of the Democratic Republic of Congo (DRC) to Uganda and other east African countries last year.

The latest United Nations’ report assessing the smuggling racket says the money is used to finance the war in eastern DRC.

The 276-page report by the UN Group of Experts on the DRC names three Uganda-based families as “major illegal gold exporters in 2013.”

Armed conflict, corruption, poor quality of life for citizens, illegal mineral exploitation and interference from neighbouring countries in pursuit of mineral wealth remain major sources of instability in the DRC.

Obscure mining concessions in the DRC are said to be hampering the country’s economic growth. The Africa Progress Panel, after analysing five mining deals in the DRC late last year, said there was massive undervaluation of assets and sale to offshore companies.In total, the five deals have cost the country US$1.36 billion dollars, about twice the DRC’s combined annual budget in 2012 for health and education.

The UN group estimates that about US$ 271-million’s worth of gold – two-thirds of the total value of smuggled DRC-extracted gold – passed through Uganda last year. The Ugandan government lost an estimated US$2.7million dollars in tax revenues by failing to account for this trade, the UN report says.

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