Kenya flagged as regional transit hub for smuggled gold
Part of the gold that is smuggled out of South Sudan, the Democratic Republic of Congo and, to a lesser extent, Ethiopia, and possibly Sudan passes through Kenya before being ultimately re-exported.
Kenya remains a regional transit hub for flows of yellow metal headed for the United Arab Emirates (Dubai), a new report has revealed.
According to the African Gold Report by SWISSAID released on May 26 describes Kenya as a medium-sized gold producer (according to African standards), with extraction mainly through Artisanal and Small-scale Mining (ASM) regional hub with both inbound and outbound illicit gold flows, origin of part of the smuggled gold imported into Dubai.
Part of the gold that is smuggled out of South Sudan, the Democratic Republic of Congo and, to a lesser extent, Ethiopia, and possibly Sudan passes through Kenya before being ultimately re-exported.
According to the report, there are no records on how much gold mined is in the country.
“The bulk of domestic gold production comes from ASM production and is not recorded by Kenyan state authorities due to the highly informal nature of that subsector,” it reads.
The report is part of a larger research project on African gold flows on the trail of African gold.
The research further refers to another study published in 2022 which estimated that ASM in Kenya yields 6.9 tonnes of gold a year on average. Official gold production figures (e.g 358 kg in 2024) cover the output of only two licensed mines.
In other words, Kenya acts as a transit hub for gold from neighbouring and nearby countries, the report revealed.
“Most, if not all, the gold extracted in Kenya or imported into the country is exported. Undeclared production from Kenyan ASM is smuggled out of the country and reaches mainly the United Arab Emirates, possibly also Uganda and Tanzania,” SWISSAID noted.
It further points out that the two licensed medium-scale mines responsible for Kenya’s declared gold production ship their material to refiners located in South Africa and Switzerland, whereas official figures for gold exports do not account for the scale of the phenomenon or its evolution.
“They have remained at the three-digit level (e.g. 672 kg in 2023) and not moved much in the last ten years (2014-2023),”
By contrast, their mirror image, namely imports of gold from Kenya reported by the authorities of the other countries, have shot up in the late 2010s and are consistently above the 8-tonnes limit since then (e.g. 9.65 tonnes in 2023),” the report says.
It adds: “One would be hard pressed to calculate outbound illicit flows precisely, given that there are many unknowns in the equation, but there is little doubt that they currently exceed 2 tonnes per year.”
Given the unreliability of the figures on total weights of gold exports from Kenya found in UN Comtrade, SWISSAID was reluctant to use that database in its analysis of the destination of those exports.
SWISSAID asked Kenya National Bureau of Statistics (KNBS) to share data on gold exports disaggregated by country of destination but the figures it sent contained obvious inconsistencies and possible errors.
SWISSAID highlighted them and asked several follow-up questions which KNBS claims to have forwarded to the “customs authority of Kenya in charge of declaration.”
A month and half later, KNBS wrote that it still hadn’t heard back from that authority which may be the Customs & Border Control Department (CBCD), a department within KRA. Two months later, SWISSAID wrote again to KNBS, but received no reply.
More than a year later, SWISSAID addressed the head of CBCD with a formal request for information, asking again for gold exports data disaggregated by country of destination, but received no reply. Attempts at obtaining this type of data from PlanetGold’s Kenya programme proved entirely fruitless.
SWISSAID observed that most of the gold extracted through ASM in Kenya is not declared at the production stage. There is therefore no choice but to rely on estimates to get an idea of the scale of that subsector’s output.
One such estimate can be found in the National Action Plan (NAP) for Artisanal and Small-Scale Gold Mining in Kenya which was published in 2022 by the Ministry of Environment and Forestry.
Based on a baseline study conducted in 2019, which covered six counties (Kakamega, Migori, Siaya, Nandi, Narok and Vihiga) and looked at mercury consumption, the authors of the NAP estimate that gold production through ASM in Kenya reaches 6.9 tonnes a year on average.
The authors of the NAP explain that “the bulk of gold production in Kenya is usually done by small-scale and artisanal miners in Western Kenya, however, since the gold is traded informally this is never reported in government statistics.
NAP acknowledges that ASM gold production is not restricted to the counties covered in its baseline study, but present in others as well.
So, the actual gold production from this subsector at the national level could be even higher than the estimated 6.9 tonnes.
