Uganda Bans Raw Exports, Launches $250M Gold Refinery

Yoweri Museveni likes to profile himself as Africa’s biggest proponent of value addition.

According to the Ugandan president, in power 39 years, Africa has for decades allowed itself to be “robbed” by exporting raw materials, particularly minerals and other commodities, to developed economies that then reap the higher margins further up the value chain.

Museveni banned export of unprocessed agricultural products in 2021, and in April he extended the prohibition to all unprocessed raw materials, including gold, lithium, and tin. Last month, the push for value added manifested in the inauguration of Uganda’s biggest gold project, Wagagai Gold Mining.

The fuel behind the venture is a $250 million investment by China’s Liaoning Hongda Enterprise, of which Wagagai Mining is the Ugandan subsidiary. With 30 million tonnes of proven reserves of gold ore, Wagagai can refine gold to 99.9% purity, the government says, enabling production of 1.2 metric tonnes annually.

When fully operational, the project is expected to create over 5,000 direct jobs, with gold exports generating over $100 million annually during its 20 years’ lifespan. Uganda raked in $3.4 billion from gold exports in 2024, but mostly from artisanal mining that Museveni wants to discourage.

“Under my leadership, we will not export unprocessed minerals, as this undermines our economy,” Museveni promised. The Wagagai project will end “wasteful” exports and usher Uganda into a new era of value addition.

Just as importantly, for many observers, Wagagai Mining represents a new phase in the deepening but unequal relationship between Uganda and China. Chinese investors have pumped close to $1 billion into sectors like mining, agriculture, manufacturing, oil and gas, and industrial parks in the East Africa nation.

The gold mining and refining project represents another step in China’s effort to control African minerals. For Beijing, keeping Wagagai in a tight grip is of strategic importance. Uganda has seen its public debt rise to unprecedented levels, hitting $31.5 billion in June, of which $2.5 billion represents expensive loans from Beijing. Parliamentary records indicate Uganda paid China $178.7 million as of December 2024 for debt servicing, the most to any of its lenders.

The cost of servicing the loans has prompted legislators to plead with China to cut interest rates; thus far, to no avail.