Who Is Smuggling Gold… and Who Is Protecting the Smugglers? (1 – 2)

Reckoning

Adel El-Baz

1

The government is the one smuggling gold—without qualification. And the government is also the one protecting other smugglers, directly or indirectly. How so?

Let me first tell you that the government used to export gold through companies affiliated with the security apparatus, others linked to military intelligence, or through state-owned companies that had nothing whatsoever to do with trade. Such companies possessed the power to do as they pleased. Some of them intimidated the central bank through their influence or their proximity to powerful figures, preventing any scrutiny of gold export proceeds. They could delay remittances or appropriate them at will. There were also companies and individuals exporting gold despite having no connection whatsoever to either precious or base metals.

2

During wartime, the government was compelled to export gold by air in order to purchase strategic commodities, bypassing customs authorities, standards and metrology agencies, and even the central bank. Tens of tons of gold were exported in this manner, and these quantities were never recorded in any official documentation.

As a result, when the state announces annual production of 70 tons, it receives revenues amounting to no more than 20 percent of that output.

The reason is smuggling, which the relevant official institutions—the Central Bank of Sudan, Customs, and the Standards Authority—have been unable to control. Some state entities have become addicted to these practices. Although the scale of such activities has declined, certain institutions continue to smuggle gold through indirect and illicit channels.

3

The other major avenue of smuggling is through traders. These individuals purchase gold directly from miners or from markets located near mining areas. Gold was previously smuggled through Khartoum Airport using private aircraft, particularly the planes of the Janjaweed deputy leader, which were exempt from inspection. Smuggling also occurred through border crossings by bribing certain customs officers.

After the outbreak of the war, Sudan’s borders were effectively thrown open to gold smuggling. Today, most smuggling takes place through the Egyptian border, making Egypt one of Africa’s largest gold exporters.

According to information from the Egyptian Central Bank, Egypt’s gold exports reached $7.6 billion last year, despite the fact that the country produces only 18 tons of gold annually. The remainder, according to the author, originates from Sudan. Meanwhile, Sudan’s official gold export revenues amounted to no more than $1.5 billion, according to a report by the Ministry of Minerals.

Sudan’s other borders have likewise long served as open corridors for smuggling. From Darfur, gold crosses into Chad with little or no oversight. The Singu mines now export gold directly to the Central African Republic, from where it is shipped onward to Dubai.

4

Now that we know:

1. The volume of production from official sources, most of which comes from artisanal mining areas;
2. The parties engaged in smuggling gold (the government and traders);
3. The annual losses resulting from smuggling, estimated at $8.5 billion—

Assuming Sudan produces the officially recorded minimum of 70 tons annually, and based on current market prices, that quantity should generate approximately $10 billion in annual revenues. Unfortunately, the country receives only about $1.5 billion.

These alarming figures are not mere speculation. All of this information is known to the government and its official institutions—from the Central Bank of Sudan to the Ministry of Finance, the Ministry of Minerals, the Standards and Metrology Authority, Customs Police, the regular police, the judiciary, and the public prosecution.

All of these institutions know exactly how gold is smuggled, the routes used, and the parties involved. Yet they do nothing. They appear entirely incapable of stopping this hemorrhage, which deprives the country of $8.5 billion every year.

Why?

Why this complete inability to control the country’s most important resource?

Can it really be that all these institutions are both powerless and corrupt? Or is there a deeper flaw in the policies governing the sector, compounded by chronic administrative failures in planning and implementation? Or is it all of the above?

To me, it appears to be a combination of all these factors. God knows best. What puzzles me is that the state knows exactly what the solution is, yet does nothing. We watch the nation’s wealth being smuggled away and looted while those in authority stand by fully aware of what is happening.

5

So what is the solution?

The first step is for the state itself to stop smuggling gold through its own companies or through entities involved in importing strategic commodities or any other goods.

One of the best decisions made by the Central Bank of Sudan in recent years was to prohibit government-owned companies from exporting gold directly, allowing them only to sell their gold purchases to the central bank. This was a wise move, as it closed a major gateway for corruption and disorder.

If the state ceases its own involvement in smuggling, the Central Bank can then assume responsibility for financing the country’s needs—particularly the needs of the army—and provide the resources and foreign currency required for the Dignity War through official, transparent channels whose inflows and outflows can be monitored and regulated.

This solution does not require studies, committees, or endless consultations. It requires only a single decision from the leadership: an absolute prohibition on exporting or removing gold from Sudan by any party without adhering to the laws regulating gold exports.

Is it a simple solution?

Not exactly—but it does require political will.

And here, Mr. President, one cannot continue with a policy of “digging with a needle” while billions of dollars are being looted and smuggled out of the country by land and air.

Secondly, the state knows that most of Sudan’s gold—around 70 percent of total production—comes from artisanal mining areas. This is where efforts to establish control should begin.

Across the world, including in Africa—particularly in countries such as and —this sector exists but is regulated through laws, cooperatives, companies, and partnerships. It is not left in the state of chaos currently prevailing in Sudan.

Would it really be so difficult or impossible to register miners, organize them into cooperatives, or establish companies that provide them with services and appropriate equipment? Such arrangements would encourage miners to operate within formal institutional frameworks, enabling authorities to regulate the sector and monitor production.

This does not require confiscation or compulsory purchasing. It simply requires knowing how much gold is being produced and where it is going, while adopting attractive pricing policies that discourage smuggling.

The first step is to establish control over production areas and the gold being produced. I am speaking here specifically about production in Northern Sudan and the River Nile State, which together account for more than 60 percent of the country’s total output.

Successful models already exist; there is no need to reinvent the wheel. By implementing this simple idea, the government could gain comprehensive control over production. It already exercises oversight over the output of major companies operating in the sector.

Are these simple ideas unknown to the government?

Of course not.

Yet, regrettably, it continues to watch billions of dollars being squandered while doing nothing, despite being fully aware of the situation.

To be continued.