A new report by Uganda’s Advocates Coalition for Development and Environment (ACODE) and U.S.-based Global Financial Integrity (GFI) has identified systemic weaknesses in Uganda’s mining regulations that enable illicit financial flows (IFFs), costing the country critical revenue and undermining governance of its mineral resources.

Titled “Uganda’s Mining Legal Regime: Addressing Illicit Financial Flows Risks and Revenue Loss in the Mineral Supply Chain,” the report, released on 2026, highlights informal mining, corruption, underfunded oversight bodies, misuse of free trade zones, and gaps in mineral data management as key drivers of IFFs.

These practices—including tax evasion, smuggling, and money laundering—divert funds needed for public infrastructure and services, the study warns.

Uganda’s 2022 Mining and Minerals Act, designed to modernize sector governance, has yet to be fully operationalized due to delayed regulations and poor inter-agency coordination, the report states.

Regulatory bodies also face funding shortages, while existing laws lack alignment with global anti-IFF standards such as the Extractive Industries Transparency Initiative (EITI).

“Operationalizing the Mining Act by enforcing regulations is critical to curbing illicit activities and revenue loss,” said Onesmus Mugyenyi, an ACODE research fellow.

The report urges Uganda to adopt traceability mechanisms for minerals, boost investment in regulatory capacity, and improve data-sharing between agencies.

It also calls for revising double taxation agreements to close loopholes and stricter oversight of free trade zones often exploited for smuggling.

“Reforms must prioritize transparency to ensure mineral wealth benefits all Ugandans,” said GFI Policy Director Philip Nyakundi.

The findings come as Uganda seeks to expand its mining sector, which contributes less than 1% to GDP despite untapped reserves of gold, cobalt, and rare earths.

The report presses policymakers, civil society, and industry leaders to enact reforms that safeguard revenue and align with international best practices.