GOLD RUSH SCANDAL: Kenya’s Sh8 Billion Export Bonanza Masks Massive Smuggling Network Feeding Dubai’s Refineries

The numbers tell a story Kenyan authorities would rather keep buried. Between April and June this year, Kenya shipped 1,217 kilogrammes of pure gold to Dubai worth Sh8.19 billion, a figure that dwarfs the country’s entire gold export earnings for 2023 and raises uncomfortable questions about where all that gold is really coming from.

The second-quarter earnings were more than four times the country’s average annual gold earnings of Sh1.81 billion recorded in the decade to 2023, and nearly double the full-year export value for 2023, which stood at Sh4.70 billion. The unprecedented surge has thrust Kenya into the international spotlight, but not for reasons government officials would celebrate.

Behind the gleaming export statistics lies a darker reality that investigators, international watchdog groups and industry insiders have been piecing together for years. Kenya has emerged as a critical transit hub for blood gold flowing from conflict zones in South Sudan, the Democratic Republic of Congo, Sudan and parts of Ethiopia, with most of the smuggled metal shipped to Dubai and declared for import there  .

The scale of the deception is staggering. While Kenya officially reported exporting just 672 kilogrammes of gold in 2023, import records from the United Arab Emirates showed 9.65 tonnes of gold declared as having originated from Kenya the same year . That discrepancy alone represents over 8,000 kilogrammes of gold worth approximately Sh112 billion at current prices moving through Kenya illicitly from neighbouring countries in a single year.

Harry Kimtai, Principal Secretary for the State Department for Mining, attempts to explain away the numbers with talk of formalization and high prices. The government facilitation of artisanal miners has contributed to higher volumes of officially recorded exports, while a jump in global gold prices by more than 50 percent since January 2025 has prompted investors to sell their holdings, he tells the Business Daily.

But even Kimtai cannot entirely sidestep the elephant in the room. Kenya is a transit country for gold from neighbouring countries and there may be instances where gold originating from neighbours is declared as originating from Kenya, he admits, a carefully worded acknowledgment that barely scratches the surface of what international investigators have uncovered.

The Swiss development charity SwissAid has spent months documenting Kenya’s role in what amounts to an industrial-scale laundering operation for African gold.

Illicit gold outflows from Kenya likely exceed two tons annually, yet official records showed only 672 kilogrammes of declared gold exports in 2023.

The vast majority of gold entering the country leaves without being officially declared for export, creating a massive statistical black hole that authorities have struggled to explain.

The routing is well established. Gold from conflict zones in South Sudan and the Democratic Republic of Congo is transported through Kenya to Dubai and Abu Dhabi via Jomo Kenyatta International Airport.

Once in the UAE, the gold enters the sprawling Dubai refinery system where its origins are scrubbed clean, emerging with fresh documentation before being sold into global markets.

The Global Initiative Against Transnational Organized Crime estimated in a 2023 report that between 100 and 200 kilogrammes of Congolese gold enters Kenya every month, translating to about 2.4 tonnes a year valued at $140 million.

Traders use Nairobi and Mombasa as re-export points to Dubai, creating a pipeline that has operated with stunning efficiency for years.

The mechanics of the smuggling network are as sophisticated as they are brazen. From mining sites scattered across Western Kenya in Migori, Kakamega, Siaya, Narok and Vihiga counties, gold makes its way to Eastleigh in Nairobi, where a web of middlemen and shadow refineries operate beyond the reach of government oversight. From there, unrecorded gold is smuggled out through Jomo Kenyatta International Airport, sometimes disguised as legitimate cargo.

The involvement of high-ranking officials is an open secret. An expert on artisanal and small-scale mining consulted by SwissAid stressed that smuggling networks shipping gold out of the country enjoy the backing of politicians . In one particularly audacious incident, a consignment of over 3,000 kilogrammes of gold from the DRC worth about Sh43 billion mysteriously vanished at Jomo Kenyatta International Airport.

Such large volumes of precious metal rarely disappear without the complicity of powerful figures with access to airport security and customs operations.

The timing of Kenya’s gold export boom coincides suspiciously with other developments. In February 2025, Cabinet Secretary for Mining Hassan Joho presided over the opening of the largest gold souk in East and Central Africa at BBS Mall in Eastleigh.

Touted as a game changer for legitimate trade, critics worry the facility could instead become another node in the smuggling network, providing additional cover for illicit gold flows.

Joho told traders the gold market would not only sell jewellery but also serve as a place where raw gold will be processed for value addition ready for the global market.

He emphasized bringing raw gold from Western Kenya and Northern regions for processing at the mall. But without robust tracking systems and enforcement, such facilities risk becoming sophisticated laundering operations rather than engines of legitimate commerce.

Kenya’s artisanal mining sector provides the perfect camouflage for smuggling operations. The sector employs over 250,000 miners and supports the livelihoods of approximately 800,000 to one million people, concentrated in counties like Migori, Kakamega, Vihiga, Narok and Siaya.

The scale and informality of artisanal operations make it nearly impossible to distinguish locally mined gold from smuggled contraband.

A 2019 baseline survey estimated annual artisanal and small-scale mining production at 6.9 tonnes, dwarfing the roughly 410 kilogrammes produced by Kenya’s two licensed industrial mines. Yet even that substantial artisanal output cannot account for the volumes showing up in UAE import statistics.

The real production figures remain shrouded in mystery. Most artisanal and small-scale mining gold is never recorded in government books because it is either traded by unlicensed dealers internally or smuggled to neighbouring countries through porous borders, one expert told SwissAid.

Private gold refineries have proliferated in recent years, further muddying the waters between legitimate and illicit trade. Companies such as Afrik Gold Testers, Gulf Refinery and Emirates Refinery Ltd have sprung up in Nairobi and Western Kenya, reportedly backed by Dubai-based investors. These operations process gold with minimal oversight, asking few questions about provenance.

The human cost of this trade extends far beyond Kenya’s borders.

Reports have surfaced of secret gold transactions involving Sudan’s Rapid Support Forces, with Sudanese gold reportedly transported through Nairobi’s Jomo Kenyatta International Airport en route to Dubai.

Revenue from gold smuggling fuels armed groups, finances terrorism and undermines regional stability, creating a direct link between luxury gold markets in Dubai and violence in Africa’s conflict zones.

Global gold prices have only intensified the incentive structure driving this trade.

The international average price per ounce rose 12.1 percent between March and June to $3,369, up from $3,005 three months earlier. Gold has seen its biggest rally since the 1970s, rising by around a third since April when tariffs announced by US President Donald Trump disrupted global trade patterns and sent investors scrambling for safe haven assets.

The price surge lifted gold to the top of Kenya’s export basket to the UAE, leapfrogging jet fuel re-exports, goat meat, tea and cut flowers.

But while legitimate exporters celebrate the windfall, the real winners are smugglers who have built a shadow economy worth billions operating in plain sight.

Government reform efforts have produced more rhetoric than results. Legislation was introduced in 2023 to formalize small-scale mining and reduce the illegal gold trade, but has not yet become law.

In the meantime, weak enforcement, lack of licensing and porous borders allow unregistered traders to dominate the gold supply chain.

Kenya has announced plans to establish a specialized Mining Police Unit and push for regional certification of gems and minerals. But without addressing the systemic corruption that enables smuggling at the highest levels, such measures risk becoming window dressing rather than meaningful reform.

The discrepancies between Kenya’s official export data and trading partner import records have persisted for over a decade.

The mismatch between 2014 and 2023 added up to over 33.5 tonnes worth about $1.68 billion, according to SwissAid’s analysis. Almost all gold mined or imported into Kenya leaves the country, but only a fraction is recorded by official statistics.

As Kenya celebrates its record gold export earnings, the uncomfortable truth lurks beneath the surface.

The country has become a crucial cog in a transnational smuggling machine that siphons mineral wealth from Africa’s poorest and most conflict-ridden regions, enriching criminal networks, corrupt officials and Dubai refineries while leaving local communities mired in poverty and violence.

The Sh8.19 billion in official second quarter exports may represent a small fraction of the gold actually moving through Kenya.

Until authorities confront the full scope of the smuggling operations and the powerful interests that protect them, Kenya’s gold boom will remain built on blood and deception rather than legitimate prosperity.