Kenya’s President William Ruto has clearly said that the country will no longer export raw gold abroad.
Speaking at Kisumu State Lodge in the Nyanza region in mid-September, he was adamant that the country must process its gold before exporting.
This short statement carries significant weight, positioning Kenya among a growing number of African nations realising that the real value of minerals isn’t in digging them up but in what is done with them afterwards.
Preserving the Gold Value in Kenya
Ruto’s argument is quite clear. He points out that gold leaves Kenya as an unrefined lump, gets processed elsewhere, often in Dubai, and only a small part of its value benefits Kenya.
He told reporters that gold is being exported through unofficial channels and that he will stop it; he warned that “there is a lot of gold being exported out of Kenya through all manner of corners.”
His plan, as he explains it, is to make it illegal for anyone to export gold from Kenya unless it has been processed and gone through official government channels.
This move, he says, isn’t limited to gold alone. The policy aims to eventually cover other minerals mined locally, like coltan and rare earth elements, as the government works to reorganise the mining sector so more value stays in Kenya.
Let’s be clear about what’s actually changed so far. No laws have been enacted yet; this is simply a presidential announcement of intent.
Experts watching the critical minerals sector have warned investors to distinguish between the government’s policy statement and the existing legislation that already bans exports.
The direction is unmistakable and goes far beyond gold. Ruto has named gold, limestone, iron ore, graphite, titanium, and soda ash as key minerals under the intended policy.
Ruto also said his government will collaborate with investors to develop the necessary processing facilities, including immediate plans for gold refineries, as well as an oil refinery and petrochemical complex.
Artisanal and Small-scale Mining Forms Backbone
Kenya is not a major gold producer by global standards, and its official production figures may seem modest.
Government data puts annual output at around half a tonne: the country produced 565 kilograms of gold in 2022, up sharply from 292 kilograms the previous year.
Even so, that remains well below the all-time high of 3,600 kilograms recorded in 2012.
These figures, however, cover only the formal, licensed part of the industry, including two industrial operators, Karebe Gold Mining and Kilimapesa Gold.
Their combined output is far smaller than the amount extracted by artisanal miners.
That is because artisanal and small-scale mining (ASM) forms the backbone of Kenya’s gold sector and vastly outweighs formal production.
A baseline survey estimated annual ASM output at roughly 6.9 tonnes, more than 10 times the recorded industrial figure.
By contrast, government data for 2024 recorded just 358 kilograms of declared production.
The State Department for Mining estimates that roughly 300 kilograms of gold changes hands each month through largely unregulated transactions.
That gap is believed to cost the exchequer about KSh 1.2 billion a year in lost royalties.
The broader regional picture is similar. Research on Africa’s gold sector suggests that artisanal miners produce more than half of the continent’s total output, much of which is never formally declared.
Migori County alone, one of Kenya’s best-known gold-producing areas, is estimated to have the capacity to produce around 34 tonnes a year.
If properly captured and taxed, that output could be worth tens of billions of shillings annually to the economy.
This gap between what is produced and what is officially recorded lies at the centre of why Ruto is pushing the policy.
It is not only about processing; it is also about bringing the industry into view. A sector this informal is difficult to tax, difficult to regulate, and makes it easy for gold to leave the country unnoticed.
Where the Kenyan Gold is Taken
The informal supply chain usually begins at small mining sites in western Kenya, where miners sell what they produce to local brokers and unlicensed dealers.
From there, the gold generally moves towards Nairobi. Eastleigh, in particular, has earned a reputation as a hub for middlemen and informal refiners operating with little oversight.
The gold then leaves the country, often through porous land borders or airports, before making its way to international trading centres. Dubai is the most prominent destination.
The United Arab Emirates has long been the preferred destination for gold leaving East Africa through informal channels, partly because it places few demands on sellers to prove where the gold came from and partly because it offers a liquid, well-established market.
There, gold can be melted down, reshaped and re-exported, with its African origins effectively erased.
There is also a formal side to the trade, and it has expanded in recent months. Global gold prices have risen by more than 50% since the start of 2025.
Reforms aimed at bringing artisanal miners into the formal system have helped push recorded exports to Dubai to roughly KSh 8 billion, according to officials at the mining ministry.
They attribute the increase to both the price rally and continuing formalisation efforts.
Even so, those officials acknowledge that a significant amount of gold moves through channels no one monitors, is traded by unlicensed dealers or is smuggled across neighbouring borders where enforcement remains weak.
Expensive Licences
It is easy to describe informal trading as simple evasion, but the reality on the ground is more complicated.
Formal licences, environmental rules and the paperwork needed to sell through recognised channels can be slow, expensive and, for miners living from one day to the next, simply unrealistic.
Informal brokers often pay cash immediately, without asking questions, which matters greatly to miners who have no access to credit or savings.
With weak enforcement and long, porous borders, the chances of being caught are relatively low compared with the convenience of selling informally.
The result is a supply chain in which formalisation efforts are up against a well-established, low-friction informal system that has served miners and buyers for years, even though it leaves the state with very little of the value.
Can Kenya Process the Gold it Mines?
This is the question that will determine whether the policy works or simply pushes more gold underground. By the government’s own account, Kenya’s refining capacity is still being developed.
Ruto has identified three gold refineries that are either already operating or under construction, including facilities planned for Kakamega, near the country’s main artisanal gold belt and Nairobi.
The thinking is that, once local refining capacity is up and running, miners will be able to sell gold that has already been processed to an export-acceptable standard, eliminating the need to send raw material abroad.
But whether three refineries can handle even the more than 500 kilograms officially recorded each year, let alone the several tonnes believed to move through informal channels, remains uncertain.
Refining gold to export-grade purity involves far more than installing a furnace. It requires dependable power, skilled technicians, quality-control systems, and enough capacity to operate profitably.
Analysts following the critical minerals sector have highlighted this tension, warning that requiring processing onshore without parallel investment in power, technology, financing, and infrastructure could leave valuable deposits stranded rather than help realise their potential.
CBK to be the Main Buyer
Perhaps the most noticeable aspect of the plan is the role proposed for the Central Bank of Kenya.
Ruto has mentioned that the CBK would serve as the main buyer for gold produced and refined locally, essentially turning the country’s monetary authority into the last resort purchaser of domestically mined gold.
Ruto explained that a state buyer offering transparent, published prices would protect miners from brokers and middlemen, who currently set unofficial prices, often much lower than the market rate and keep the difference.
For miners, this could mean more consistent and better returns. For the government, it would establish a single, transparent point through which gold enters the formal economy.
This will make it easier to monitor production, collect royalties, and generate accurate industry stats on a sector that’s often shrouded in secrecy.
Will it End Smuggling?
There’s a fairly hopeful outlook for what this policy might accomplish. If local refining and a Central Bank buying scheme truly give miners better prices than they currently receive from brokers, then formalisation becomes much more attractive; miners will have every reason to choose it if it pays more, not just because it’s legal.
A strong domestic gold supply chain could also, in theory, draw investment into refining, transport, equipment, and other related services that benefit from mining, spreading economic gains beyond just the mine itself.
On the other hand, the less optimistic scenario is equally possible. If the formal system is slower, offers lower prices, or simply isn’t developed enough when enforcement gets stricter, miners and brokers used to informal trade might just stick with their familiar smuggling routes instead of waiting in line at a refinery or a Central Bank counter.
Export bans tend to work best when formal options are genuinely more appealing than illegal ones, not just legal.
Same Script Across Africa
Kenya’s recent move aligns with a clear trend across the continent. Ghana’s Gold Board has already banned the export of unrefined gold doré.
Guinea has introduced a ban on exporting raw gold unless it’s refined domestically to 99.5% purity.
Meanwhile, the Democratic Republic of Congo has extended its restrictions on cobalt exports, and Zimbabwe is planning legislation to stop the export of unprocessed lithium concentrate starting from January 2027.
Tanzania has also been pushing for similar value-added rules in its mining sector, reflecting a broader regional shift away from merely exporting ore.
A report from the World Economic Forum about the sector shows that Southern African countries, in particular, stand to benefit from increasing global demand for critical minerals.
But this only makes sense if they can move up the value chain, through processing and regional cooperation, so they can capture more economic value and strengthen their mineral supply chains.
Kenya’s policies aren’t just isolated efforts; they represent a larger regional strategy, with resource-rich countries aiming to leverage their geology to attract industrial investment, not just earn royalties.
There’s also a geopolitical angle. Kenya’s Mrima Hill deposit, rich in rare earths and niobium, has attracted interest from major powers seeking supply routes outside China.
Reports indicate that Washington has pledged support for Kenyan mineral processing as part of this broader competition.
President Ruto’s gold policy fits into this same framework, using access to Kenyan deposits as leverage to attract investment in the country’s industrial sector, rather than simply exporting raw ore to the highest bidder.
Kenya Has Potential to Gain From Gold Mining
Should the policy succeed, it could make a significant difference in terms of what Kenya stands to gain from mining.
The Kenyan government previously set the ambitious goal of growing the mining industry’s contribution from below 1% of GDP to more than 10% by 2030, with gold providing the first test case for this vision’s achievability.
Gaining a greater cut of the current annual loss of approximately KSh 1.2 billion in unreported royalties, bringing the lives of at least tens of thousands of individuals engaged in informal mining within the legal fold, and establishing an industry around refining with all its attendant jobs would constitute some very concrete gains.
But the dangers here should not be ignored either. With a country that has a well-developed informal mining sector, porous borders which are difficult to police, and international markets such as Dubai, which have proven themselves to lack interest in verifying sources of gold, implementing an effective export ban on gold sounds like a tall order.
The power of announcements tends to wear off after a time, and experience suggests that swift and thorough implementation is often lacking as was the case a few months ago with the resumption of mining in the Moyale gold mines of Marsabit County.
Getting from Ruto’s words in Kisumu to the establishment of functional refineries, the Central Bank’s purchasing programs, and effective border control will not happen overnight.
