The Ugandan government’s recent announcement of a $12 trillion gold discovery has generated a ton of domestic intrigue as well as a bit of foreign skepticism.
That’s because the $12 trillion amount is said to exceed the entire market capitalization of all gold ever mined in human history, according to a Canadian-online financial newsletter Pinnacle Digest.
That discovery, reported to be 320,000 metric tons, presents an implausible amount considering world production is just 3,000 metric tons annually. The amount of gold suddenly available to be mined in a country slightly smaller than Oregon would, no doubt, create a precipitous reduction in gold value.
The mother lode so far has been estimated mainly by airborne satellite but not yet substantiated by underground drilling and the multiple step process necessary to verify the claims.
However, Pan-Africanist scholar James Small believes that the satellite technology is most likely a solid indicator of a substantial find whatever its amount.
“The white people who run the world gold industry know all about the gold in Uganda before the people in Uganda know about it,” he said. “So announcing it ain’t doing nothing but telling the rest of the black folks that it’s there,” said Small, who taught 15 years at City University of New York.
The gold presents another challenge for an African country on how to conducts business and protect its resources while working with foreign countries, be it the United States, Canada, China with the technological prowess to extract precious metals from the earth.
“The question is how should African governments Uganda, included, negotiate these contracts with the people who carry out mine technology,” said Small. “That’s where we are losing the money. Everybody knows the gold is in the ground in Africa. They can just about tell you how much gold there is in the entire continent.”
African leaders can be co-opted but also threatened and worse and Small said he’s aware of the dangers they can face.
“The problem is our leadership. Do they have the skill, the will or the knowledge to know how to deal with Western technocrats and business people when it comes to negotiating contracts on the raw material in the earth in Africa,” he said. “And they have proven that they don’t. And that’s the problem.”
According to Pinnacle Digest there are concerns among Western extraction companies about “Resource Nationalism” in Africa, South America and Asia in which the countries doing the work could face higher tax structures and cough up bigger percentages of profits and royalties to the countries where the commodities lie.
They say the companies have multiple risk factors like getting the material out of the ground, earning back investment costs, risk of failure along with shareholder concerns to think about.
Small thinks African countries need to only be concerned with maximizing every potential avenue that benefits their people. He said the advantages can be great.
“Mining the gold, not destroying the environment, processing the gold and not sending it out of country so they can get jobs for their own people has to be a priority,” he said. “What kind of contracts are going to be signed in Uganda so the processing is done in Uganda instead of sending the gold as raw ore overseas. It also tells the world that Uganda now has the financial undergirding that will get her out of a lot of her debt if it’s handled right and allow her to do some industrial development of her own. But again it depends on the kind of contract you end up signing.”
There have been, according to Small, good examples as well as bad ones, as to how African leaders have handled their affairs. There have also been leaders who, in advocating for their countries, have not fared well. Former Tanzanian President John Magufuli, who died in March of 2021, allegedly of Covid-19-related heart failure, pointed his country and the continent in a good direction.
“The best example was Magufuli in Tanzania who had that mysterious heart attack a year-and-a-half-ago,” said Small. “He might have had a real heart attack but the Western world has been so trifling and murderous one has to assume first they murdered him before we could assume God killed him naturally.
“But what Magafuli did was first he made the British pay for the all of the back costs of the gold they were stealing,” Small added. “Came out to billions and he won because what he did was say, ‘You aren’t getting no more gold out of my country, everything stops, until we settle this past debt’ because they were stealing this. Then he set up a contract where there was equitability in terms of the split of the wealth that comes out of the ground. So these were the people who had to pay up, the companies out of Britain who were mining the gold.”
The inexhaustible commodities supply in Africa makes it the most likely the world’s richest continent and that’s been problematic. Uganda’s giant neighbor Democratic Republic of Congo is endowed beyond belief with numerous natural resources and always beset by war.
“If you take bauxite, of which Africa has a lot, there is six steps to go from raw to aluminum,” said Small. “So what Africa is saying is do three steps in Africa and three steps in Europe or America. This way my people learn the technology and can pass it on to the next generation and can have jobs in an industry that is using the natural resource of the country.”
Conversely, the wealth in South Africa, decades after the nominal fall of white rule, remains out of the hands of the desperately poor even if a nouveau riche class of elite blacks emerged.
“What they negotiated was nothing more than having black people manage apartheid,” Small said. “You didn’t negotiate one mine coming back to the black people. You didn’t negotiate the farmland coming back to the people.
“It should have been part of the negotiation that the wealth you have stolen, which you got in banks all around the world, has to be used to build the black part of this country that you robbed, pillaged and plundered. Like how are you going to share the land so we can build farms as well? Now you got us packed in these ghettos and wondering why black folks are on drugs and killing each other.”
