Africa’s gold trade loses billions annually to illicit flows, eroding growth and opportunity. Johnson outlines a transformative approach: local refineries, traceability systems, strategic partnerships with global hubs, and reinvestment into infrastructure. Through governance and collaboration, African nations can capture value, create jobs, and deliver mutually beneficial outcomes for international markets.
Gold has always been a symbol of wealth and power, but in Africa, it also represents a missed opportunity. Each year, billions of dollars’ worth of African gold bypasses official channels, leaving the continent through illicit routes. This problem costs African nations substantial revenues and denies citizens jobs, industrial growth, and infrastructure investments that could transform economies.
Recent evidence underscores the scale of the challenge. According to SWISSAID’s 2024 study, On the Trail of African Gold, Africa produces between 321 and 474 tonnes of artisanal and small-scale mined (ASM) gold each year that goes undeclared, valued at approximately US$24–35 billion. While not all undeclared gold is smuggled abroad, a significant portion enters illicit trade, depriving governments of tax revenues and export earnings. The report further found that in 2022 alone, at least 435 tonnes of gold were smuggled out of Africa, equivalent to roughly US$31 billion at market prices.
The scale of losses for individual countries is staggering. Ghana, one of Africa’s leading gold producers, lost US$11.4 billion between 2019 and 2023 to undeclared gold exports, according to SWISSAID’s 2025 report. Over this period, a trade gap of 229 tonnes represented a substantial loss of revenue. In 2023 alone, Ghana saw 34 tonnes of artisanal gold production undeclared — roughly equivalent to the entire output from its ASM sector that year.
These figures highlight a stark reality: Africa is losing more from illicit gold flows than it is gaining in formalized investment across many sectors. The opportunity cost is immense—revenue that could finance regional infrastructure, energy access, and industrial growth is instead disappearing into informal networks.
A Win-Win Path Forward
Rather than framing this issue purely as a loss, there is an opportunity to transform Africa’s gold sector into a source of shared prosperity for both African nations and their trading partners, particularly hubs such as Dubai, Switzerland, and others involved in the global gold trade. Solutions should focus on partnerships that strengthen local beneficiation while ensuring a steady, transparent supply for international markets.
From my experience leading large-scale value chain projects across Africa, I have seen firsthand that when governments, private investors, and international partners align interests, value can be unlocked at every stage of production. The same approach can be applied to gold.
Four Strategic Steps Toward Mutual Prosperity
1. Establish Local Refineries and Jewelry Manufacturing
Much of Africa’s gold is exported in raw form, denying the continent the added value of refining and manufacturing. Establishing modern gold refineries in Africa — through joint ventures with international refiners or trading hubs — would retain more value domestically. Beyond refining, investing in jewelry and finished product manufacturing could generate significant jobs and export opportunities.
Botswana’s diamond strategy provides a clear precedent. By negotiating to have a portion of rough diamonds cut and polished domestically, Botswana created new industries and thousands of jobs. Applying a similar approach to gold would allow African nations to capture a greater share of the global jewelry market while promoting sustainable development and inclusive economic growth.
2. Implement Traceability and Certification Mechanisms
Trust is vital in global commodities trade. A credible certification system for African gold — developed with international buyers and reinforced through national and regional policy frameworks — would reduce incentives for smuggling while enhancing transparency.
While the Kimberley Process is often cited as a precedent, its mixed record highlights both potential and limitations. A new gold traceability framework should build on Kimberley’s strengths (multilateral cooperation, certification of origin) while addressing weaknesses (enforcement gaps, definitional ambiguity). Digital technologies, including blockchain, can strengthen traceability and assure regulators and consumers that African gold is ethically sourced. Success requires supportive government policies, enforcement mechanisms, and cross-border cooperation — illustrating how solutions are both policy-driven and partnership-enabled.
3. Direct Partnerships with Major Gold Hubs
Hubs like Dubai and Switzerland are pivotal in the global gold supply chain. Rather than viewing these centers as competitors, African countries could formalize agreements that secure gold trade flows. Dubai’s expertise in refining and trading could be leveraged through co-investment in African refineries, while Switzerland’s jewelry sector could benefit from secure, traceable supplies sourced under fair terms.
Such partnerships create a “win-win”: African nations retain more value and revenue, and international buyers gain legitimacy, stability, and secure supply chains. Policy alignment and clear frameworks for trade, co-investment, and certification are essential; without them, even strong partnerships cannot fully deliver inclusive growth.
4. Channel Revenues into Transformational Infrastructure
Reclaimed revenues from reduced smuggling and local beneficiation could finance transformative projects. Africa’s infrastructure deficit (roads, energy grids, and rail networks) constrains regional trade and industrialization. Even a fraction of the US$30 billion annually lost to smuggling could fund large-scale projects, such as modern railways connecting ports to industrial hubs, renewable energy plants to alleviate power shortages, or cross-border corridors that integrate African economies. Linking gold beneficiation to infrastructure finance would enable the sector to drive long-term development and inclusive growth.
Building Credibility Through Governance
None of these steps will succeed without robust governance. Transparent regulation, predictable tax regimes, and strong anti-corruption measures are essential to attract investment. International partners will only co-invest in refining or manufacturing if policies remain stable and illicit trade is curtailed. Key measures include:
- Implementing and enforcing anti-smuggling laws alongside certification and traceability regulations.
- Ensuring predictable taxation and transparent royalty systems.
- Strengthening institutions for monitoring, reporting, and compliance.
Partnerships with development finance institutions and multilateral bodies can provide technical assistance, capacity building, and financing to make governance frameworks sustainable.
Seizing the Moment
Gold smuggling in Africa is often portrayed solely as a criminal issue. But reframing it as an opportunity for partnership and shared prosperity opens the door to practical, win-win solutions. Africa has the resources, and international partners have the expertise; together, they can transform illicit flows into engines of growth.
Investing in local refineries, building credible traceability systems, partnering with global hubs, and channeling revenues into infrastructure can help African nations reclaim billions in lost value. International partners, in turn, secure more transparent and stable access to one of the world’s most essential commodities. This is not just about stopping smuggling—it is about unlocking prosperity through inclusive growth.
The challenge is implementing these solutions at scale so that Africa’s gold trade delivers lasting benefits for its people and global partners. The question is no longer whether Africa can afford to act; it is whether it can afford not to.
About the Author
Kenneth D. Johnson, Principal at Devconia, LLC, is an expert in value chain development, international business strategy, and sustainable economic growth. With two decades of experience, he has led transformative projects at the African Development Bank and global firms, advising policymakers and executives on unlocking inclusive growth through strategic partnerships and local industrial development.
