Mining contributes 2.3% to Uganda’s Gross Domestic Product

It’s official, mining currently contributes 2.3 percent to Uganda’s Gross Domestic Product, according to State Minister for Planning Amos Lugoloobi.

Hon Amos Lugoloobi

Gross domestic product (GDP) is the monetary value of all finished goods and services made within a country during a specific period.

This growth in monetary value, Mr Lugoloobi says, is a result of the positive reforms which have been rolled out in Uganda’s mineral sector in recent years.

Mr Lugoloobi made these remarks at training organised for members of the Extractive Industries Transparency Initiative, Mr Lugoloobi said the contribution of mining to gross domestic product is up from 1.1 percent in 2016.

The reforms behind this upswing include online mineral licensing and biometric registration system of artisanal and small-scale miners.

Not less than 90 percent of Uganda’s mineral sector comprise artisanal miners, majority of whom are involved in mining metallic, industrial and building minerals components.

Uganda joined the Extractive Industries Transparency Initiative in August 2020, becoming the 27th African country to join the setup of 56 countries globally, whose promotion of transparency in mining and the extractives sector is key to its activities.

Mineral exports, over the last ten years, have taken the top position in the country’s largest exports.

According to the Bank of Uganda, gold has overtaken traditional exports such as coffee in the last two years and now Uganda’s largest export commodity, contributing at least 44 percent of the export revenue.

Mr Moses Kaggwa, the director of economic affairs in the Ministry of Finance and chairperson of the Extractive Industries Transparency Initiative stakeholders’ group, said, “However, all of you know that abundance of mineral resources in a country does not necessarily translate into development and economic growth. Experience has shown that most countries that are rich in natural resources suffer severe economic decline and underdevelopment resulting from mismanagement and poor governance of their extractive industries.”

Allied to that, mine exploration might have an adverse effect on the environment resulting in land-use change and other effects such as deforestation, erosion, contamination and alteration of soil profiles, contamination of local streams and wetlands.

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