Mali is ranked as Africa’s third biggest gold exporter. The soaring price of the yellow metal has attracted significant interest from local and international investors in the metal’s extraction including in rural small-scale mining. Artisanal mining accounts for almost one-third of Mali’s total production of gold. The lack of transparency in data on gold production and trade between Mali and Dubai in the United Arab Emirates (UAE) has resulted in massive illegal business and loss of revenue for West African countries. These earnings are even used for financing conflicts.
The major causes behind the illicit trade allegedly are Tax breaks in Mali and weak import procedures in the UAE. Only the first 50 kg of gold exported per month, is taxed in Mali. In the absence of a regional tax coordination framework, gold smugglers ship the metal from Mali for a large tax break. Almost 80% of the artisanal gold in Mali’s supply chain is produced in Senegal. Porous borders, corrupt custom officials, geographical proximity, and ethnic affinity, together with years of instability in Mali have fuelled the illicit trade.
The country also acts as a gateway to UAE gold markets by some countries like Venezuela, and neighbours like Libya. It has been estimated that Venezuela earned almost US$1 billion through gold trafficking to Mali in 2020. Legal gaps, ambiguous import procedures and practices by UAE-based buyers and the Dubai Multi Commodities Centre (DMCC) aid illegal trade. Burdened by financial issues, many West African artisanal miners turn to Emiratis to finance their activities. They borrow from them and the loan can only be paid back through exporting their gold to the UAE through illicit channels.
Read Also;
https://trendsnafrica.com/world-bank-lifts-economic-sanctions-on-mali/
https://trendsnafrica.com/malis-military-junta-unilaterally-extends-the-transition-time/
