Development Minerals could spur Uganda’s economy

Development Minerals could spur Uganda's economy

Local and international experts are meeting in Kampala to discuss financing of different value chains in Uganda’s largely unexploited or under-exploited minerals sector.

The meeting comes amidst concerns that much as minerals such as sand, gravel and salt may have a low price per ton, their value for domestic development and their potential for local employment creation is significant especially when compared to the more talked about minerals like copper and gold.

Uganda is among the countries being targeted under the ACP-EU Development Minerals Program implemented in partnership with United Nations Development Programme (UNDP).

With 70 percent of the world’s population expected to live in cities by 2050, it is projected that sand, salt, now known as ‘Development Minerals’ will play a crucial role in building homes and urban environments.

A report released last month indicated that if artisanal mining for Development Minerals, which amount to an estimated USD 350 million (1.2 trillion Shillings) per annum, were integrated within official statistics, Uganda’s GDP would increase by 1.4 percent.

Energy Ministry Permanent Secretary, Robert Kasande says that government is planning to put in place laws and regulations for Development Minerals.

“By July this year, the Government of Uganda will put in place new fiscal, legal and regulatory frameworks to support the Development Minerals sector,” Kasande said.

One of the building materials, sand, which has in the past not been regulated could be one of those Development Minerals to be targeted under the planned regulations. Of recent, sand has become one of the much sought after minerals being targeted by local and international investors. Some of whom are said to be highly connected within the government circles.

Uganda is one of the beneficiaries of the African Guarantee Fund for Small and Medium-sized Enterprises Ltd (AGF) established last year. The USD 12-million (44 billion Shillings) fund targets 5000 micro, small and medium scale ‘Development Minerals’ operators in Africa.

They are able to access to more affordable finance as a result of a partnership between the African Guarantee Fund for Small and Medium-sized Enterprises Ltd (AGF), the African Caribbean and Pacific Group of States, the European Union and the United Nations Development Programme.

African Guarantee Fund for Small and Medium-sized Enterprises Ltd (AGF), recently said it will make available USD 12 million (44 billion Shillings) in credit guarantee facilities to financial institutions in Cameroon, Guinea (Conakry), Nigeria, Uganda and Zambia in connection with loans provided by these to small and medium-sized enterprises (SMEs) working in the ‘Development Minerals’

The financing is expected to boost the livelihoods of approximately 25,000 people and their dependents across some of Africa’s most impoverished communities.

The experts in the Kampala meeting have observed that Artisan Miners can spur sustainable domestic economic development in Africa if the operators behind it have the necessary support, including affordable finance.

Artisanal Mining is responsible for the production of an estimated 83 percent of all Development Minerals by value in Uganda. The sector is said reportedly offering 390,000 to Ugandans, 44 percent of whom are women.

The government had last year ordered the eviction artisanal gold miners in Bukuya Mubende leading to protests by sections of politicians and development partners.

The African, Caribbean and Pacific Group of States, supported by the EU and UNDP, is a three-year, €13.1 million (59 billion Shillings) capacity building program that aims to build the profile, and improve the management, of Development Minerals (industrial minerals; construction materials; dimension stones; and semi-precious stones).