Discrepancies in gold trade data between figures provided by Kenyan authorities and those of other countries reveal high levels of smuggling of the precious metal through Kenya, highlighting an emergence of criminal networks using the country as a hub for gold trafficking.
According to data reported by the customs office at the Kenya Revenue Authority (KRA), Kenya’s gold exports between 2014 and 2023 were nowhere close to the massive gold imports recorded by a number of countries across the globe purportedly from Kenya.
Expert analysis by Switzerland’s international development charity SwissAid concludes that the inconsistencies point to Kenya’s blossoming as a smuggling hub for gold mined in neighbouring countries, notably the Democratic Republic of Congo (DRC), South Sudan, Sudan, and Ethiopia.
“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,” says SwissAid in a report documenting illicit gold flows.
“In other words, Kenya acts as a transit hub for gold from neighbouring and nearby countries.”
Over the 10-year period, data from the Kenya National Bureau of Statistics (KNBS) shows that KRA recorded Kenya’s gold exports to other countries across the globe as 6,469 kilogrammes in total, which is worth about Sh90.5 billion at the current gold price of Sh14 million per kilogramme. This translates to an average of 646 kilogrammes per year worth Sh9 billion.
Data reported by individual countries to the United Nations (UN) trade database, on the other hand, shows that 60,136 kilogrammes of gold, valued at about Sh842 billion was imported from Kenya over the same period.
This indicates an average of 6,000 kilogrammes of gold was imported from Kenya every year, almost 10 times the average amount recorded by Kenyan authorities every year, highlighting huge levels of illicit flow of the metal from the country.
Another inconsistency in the data is in the destinations of the gold exports. While Kenya reports South Africa as its top export market, taking up about 76 percent in 2023, Pretoria barely reports any gold imports from Kenya over that period.
Instead, about 97 percent of official reported gold imports from Kenya went to the United Arab Emirates (UAE), a globally renowned hub for gold bars and jewellery due to luxury living and businesses in cities such as Dubai.
Uganda imported about three percent of the official gold exports from Kenya, while the US bought less than one percent.
Expert analysis shows that it is not logically possible that all the recorded gold exports from Kenya actually came from within its borders, as officially reported gold imports into Kenya and local production, are hugely insufficient to substantiate the amount of exports recorded by the UN trade database.
For instance, Kenya’s gold production recorded by the State Department for Mining in 2023 was 410 kilogrammes, and imports according to the KRA was 385 kilogrammes. Exports recorded by the UN, however, was 9,653 kilogrammess, and KRA only reported 652 kilogrammes in exports that year.
This means that in that one year, over 8,000 kilogrammes of gold, which is worth about Sh112 billion at current prices, was moved through Kenya illicitly from neighbouring countries.
In total, officially recorded gold production in Kenya between 2013 and 2023 was just about 3,000 kilogrammes, but SwissAid experts reckon the actual amount produced could be much higher due to a large informal artisanal mining sector.
“Most of the ASM (artisanal small-scale mining) gold is never recorded in government books because it is either traded by unlicensed dealers internally or smuggled to neighbouring countries through the porous borders. As such no data on gold from ASMs as of now,” one expert told SwissAid.
Most of the gold produced in Kenya is mined from Migori, Narok, Homa Bay, Siaya, Kakamega, and Vihiga counties, most of which is extracted through artisanal mining, which is informal and never makes it to the books of record.
Further analysis of the nature of gold smuggling in the country also reveals a high probability of the involvement of high-ranking government officials, who collude with customs officials to evade official export and import channels.
Last year, a consignment of over 3,000 kilogrammes of gold from DRC worth about Sh43 billion “mysteriously vanished” at the Jomo Kenyatta International Airport.
This, according to SwissAid, “suggests that high-ranking state officials in Kenya are involved in smuggling schemes, because such large volumes of precious metal rarely if ever disappear without a trace.”
The State Department for Mining, through the principal secretary Harry Kimtai, did not respond to requests for comment on the findings of the report.
DRC, from which most of the gold smuggled through Kenya comes from, is a mineral-rich country yet one of the poorest in the world. A recent UN report revealed that most of the minerals, including gold, copper, and cobalt, mined from the country, are smuggled out and do not help its citizens.
South Sudan, categorised as a fragile country and just reeling off a civil war, has also been a main source of Kenya’s smuggled gold. It is also one of the poorest countries in the world.
Sudan, currently in the middle of a civil war, has also emerged as a significant source of smuggled gold through Kenya. The common thread in Kenya’s top three smuggled gold sources is fragility and conflict, pointing to smugglers taking advantage of the absence of peace in the countries.
