Uganda’s mineral production surged by 87% in the FY2023/24, while extractive sector revenues grew by 25%, according to the latest Uganda Extractive Industries Transparency Initiative reports. This sharp increase signals a real opportunity for Domestic Revenue Mobilisation, but it also forces a difficult question onto how can Ugandans actually benefiting from the country’s natural resources.
The numbers are promising on the surface. In FY2022/23, total extractive revenues amounted to UGX 530.17 billion, with mining contributing nearly UGX 300 billion and oil and gas adding another UGX 230 billion. The sector now accounts for almost 1.5% of GDP and over 1% of general government revenue.
Yet the gap between production growth and revenue growth is striking. If production is rising so dramatically, why are revenues not keeping pace? That gap points directly to persistent weaknesses in taxation, enforcement, transparency, and the way mineral value is captured before it leaves the country.
For Uganda, this is not just a technical fiscal issue. The government is actively pursuing a Domestic Revenue Mobilisation Strategy aimed at raising the tax to GDP ratio to 20%, and the extractive sector is central to that plan. But revenue collection is only one part of the story. The bigger policy question is what happens to minerals after they are extracted and what is the formalization process.
Too much of Uganda’s mineral output is exported in raw or minimally processed form, which means the country loses out on the jobs,industrial spin offs, and tax base that could come from processing, refining, and manufacturing locally. The National Development Plan IV has set ambitious targets for mineral value addition, but delivery on those targets remains weak.
On the other hand, transparency and accountability are therefore non negotiable. Uganda’s participation in the Extractive Industries Transparency Initiative provides a useful framework for disclosing production figures, revenues, and company payments, but civil society organisations have consistently pointed to serious gaps. Mineral tracking systems are still fragmented, coordination between regulatory institutions is poor, and illicit financial flows continue to erode what should be public revenue.
There is also no centralised, realtime data system that allows citizens, Parliament, or civil society to independently verify what is being extracted, who holds which licences, what companies are paying, and what government is actually collecting.
Beyond the national fiscal picture, communities living around mining areas are bearing real costs. Environmental degradation, displacement, pressure on local infrastructure and changes in traditional livelihoods are often the price paid for mining activity.
Yet those same communities rarely see a clear share of the revenues generated. That is why transparent revenue sharing arrangements and genuine citizen participation are not optional extras; they are essential to ensuring that mineral wealth translates into better public services and lasting local development.
One policy tool that deserves urgent attention is the windfall tax. When commodity prices spike or companies earn exceptional profits from Uganda’s finite natural resources, the public should have a mechanism to capture a fairer share of those extraordinary gains. Introducing such a tax would not discourage investment; it would simply ensure that when profits are unusually high, the country benefits proportionately.
Ultimately, Uganda’s mineral wealth is finite. Once extracted, it cannot be replaced. The revenues generated today must therefore be managed with a long term development lens, not used to finance short term consumption. That requires strong institutions, transparent contracts, effective tax administration, rigorous enforcement against illicit flows, responsible environmental management, and accountable public spending.
The increase in mineral production and extractive revenues is welcome news, but it should also trigger deeper scrutiny.
The question Uganda must answer is not just how much is being dug out of the ground. It is how much the country earns, who benefits, how much is lost to inefficiency or corruption, and whether today’s resource revenues are being converted into lasting improvements in the lives of ordinary citizens.
As government works to raise domestic revenues and accelerate economic transformation, the mining sector could become an increasingly powerful contributor to the national budget. But that will only happen if Uganda moves beyond celebrating production figures and starts demanding transparency, fairness, and tangible returns for its people.
The Ministry of Finance has emphasised that transparency and information sharing provide a basis for informed public debate and stronger accountability.CSOs have also identified weaknesses that require attention, including gaps in mineral tracking, enforcement, revenue management and coordination between institutions.
Recommendations emerging from Civil Society engagement have included establishing centralised, real-time data systems covering mineral production, licensing and revenues, strengthening mineral tracking to address illicit financial flows, improving beneficiation, and strengthening governance of the sector.These reforms matter because gaps in information can make it difficult for citizens, entitled to from its natural resources.
CSBAG urges Parliament, the Ministry of Finance, and all stakeholders to act decisively aand how this will shape Uganda’s development for generations to come.
Article by CSBAG
