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UG Standard - Latest News
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Gold scammers dupe investors, tarnish Uganda’s reputation

by JOSEPH NSIMBI | UG STANDARD REPORTER
29/03/2025
in Business, News
Reading Time: 3 mins read
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Gold exporters now have to pay billions of shillings in arrears to the taxman. Uganda's mining sector has seen a significant surge in revenue, with gold being one of the key minerals driving growth.
Uganda’s mining sector has seen a significant surge in revenue, with gold being one of the key minerals driving growth.

KAMPALA, Uganda — Escalating cases of gold scams are undermining revenue collection and investments in Uganda’s mining sector, says Bwesigye Don Binyina, executive director of the African Centre for Energy and Mineral Policy.

“The gold scammers have earned Uganda a bad name in the mineral market,” Binyina said in an interview. “They’ve become a major threat to individuals seeking to buy gold from Uganda.”

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The scammers entice gold buyers with huge amounts of gold at rates far below prevailing rates, according to Binyina. The Ministry of Finance reports that mining currently contributes 1.4% to Uganda’s GDP, but has high potential for growth.

Binyina attributes the scams to the current high demand for gold worldwide. The price of a kilogram of gold has risen sharply from about $55,000 to $97,000, driven by the Russian invasion of Ukraine.

“Some guys got in touch with me, and we went on a hunting expedition,” Binyina recalled. “I told them that if you want gold in Uganda, forget about it.”

Buyers are rushing to gold due to trade tensions, US tariff policies, and global uncertainties. Binyina warns prospective gold buyers to exercise caution when dealers promise huge volumes of gold.

“Trust me, I’ve been in this area for quite some time,” he said. “I know whoever is doing what they are doing. Anyone who tells you that they are looking for 20 kilograms, 30 kilograms, and they have cash, simply tell them to get their cash and go back where they came from.”

The scammers often dupe unsuspecting gold buyers by using iron ore or copper, which resemble gold. They coat the ore with copper, slice it, and package it in boxes.

“There is always a muzungu or an Indian or a brown-looking person around,” Binyina said, describing the scammers’ tactics.

Several Ugandan companies have been linked to gold scams, casting a shadow over the country’s mining sector. Blessed Riverstones Uganda Limited, Trans Equator, Simba Refinery, Metallic Commodities Limited, and Gold Vault Uganda Limited are among the companies that have been implicated in fraudulent gold dealings. These companies, along with individuals like Daniel Kananura, have been accused of orchestrating elaborate scams that target foreign investors and leave them with significant financial losses.

While the African Centre for Energy and Mineral Policy has not documented the number of scams, Binyina says they are common. The scammers often have ties to top security personnel and lawyers in Kampala.

Some suspects have been successfully prosecuted in court. In one case, Ethiopian nationals WG Dessie and Abebe Belay Engda were defrauded of $1.9 million in a fake gold scam.

In July 2021, a Ugandan anti-corruption court found three people guilty of defrauding WG Dessie of $1.9 million in an elaborate fake-gold scam. The court heard that the scammers obtained money and created false documentation for consignments of gold that never materialized.

The Global Initiative Against Transnational Organized Crime said in a 2019 report that the informal nature of Uganda’s and Kenya’s gold industries has made them vulnerable to criminal activity.

“Whereas Kampala acts as an operations base for criminal networks, Nairobi – as the major regional communications and financial hub – is the center of the financial transactions in these scams,” the report said.

Gold scammers in East Africa often target foreign investors, offering them gold at low prices. The Global Initiative Against Transnational Organized Crime reviewed major cases reported by law enforcement in Kenya and Uganda between 2021 and 2022.

The review found that defrauded investors lost an estimated $25 million in 18 incidents. In one case, a DRC national was accused of defrauding a Ukrainian of $8.32 million in 2020.

The scams have sparked concerns among Ugandan authorities and experts, who warn that the country’s reputation is at risk.

“Uganda’s mining sector is at a crossroads,” Binyina said. “We need to take decisive action to curb these scams and restore investor confidence.”

Law enforcement agencies face an uphill battle in cracking down on these networks, as many of the key players operate with impunity, leveraging political connections and legal loopholes.

Authorities have called for stricter regulations and international cooperation to curb this thriving black market. However, unless decisive action is taken, Kampala’s reputation as a hub for gold scams and smuggling is unlikely to change.

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