By Africa Risk Control (ARC) – It was one of the warm weekends of mid-June 2025. Khalid (not his real name), a Dubai-based gold trader, was relaxing in a popular nightclub around the bustling Bole area of Addis Ababa. The venue was crowded, the music loud, and the atmosphere electric—typical for a Saturday night in the capital.
As he leaned back with a drink in hand, he was approached by an Ethiopian businessman, Abreham (also not his real name), who offered a friendly welcome and struck up a conversation. What began as casual small talk quickly shifted when Khalid revealed the real reason for his trip.
“I’m here to find someone who can connect me with gold suppliers from the border towns,” he said quietly, almost testing the waters. “The big traders in Dubai want steady volumes. I’m looking for someone who can arrange shipments directly. No paperwork… fast routes.”
Abreham listened carefully. He had heard such requests before. Informal gold trading has long thrived in Ethiopia’s borderlands, especially in conflict-hit districts where state control is weak and smuggling routes are active.
Yet hearing a Dubai trader openly scout for illicit suppliers inside a nightclub bar captured a much deeper truth: the gold economy of Ethiopia is now deeply entangled with cross-border smuggling networks, driven by massive Gulf demand and high global prices.
Khalid was in Addis for one purpose — to find supply at any cost.
Gold has become one of the most politically explosive resources in the Horn of Africa. As global prices hover near USD 4,000 per ounce, the metal is reshaping power dynamics in Ethiopia and Sudan, where armed groups, regional militias and political elites are locked in deadly internal conflicts.
What once functioned primarily as a source of export revenue has now become a strategic asset that fuels war economies, sustains insurgencies, and strengthens transnational smuggling networks. Supported by data from the Ethiopia Ministry of Mines, the Sudan Mineral Resources Company (SMRC), UN Comtrade, Swissaid and the UN Panel of Experts on Sudan, this ARC analysis explores how gold extraction and conflict are increasingly inseparable in both countries.
The Global Price Shock and Its Local Consequences
The global gold boom has magnified the stakes of every ounce extracted from the Horn. As gold crossed USD 3,500 and continued rising in 2025, artisanal miners rushed deeper into conflict zones, armed actors tightened their control over mining areas, and smuggling networks expanded across porous borders.
High prices have created a powerful incentive for armed groups to tax miners, seize pits and divert production toward lucrative Gulf markets. In countries already experiencing severe political fragmentation, gold has effectively become a conflict currency—an easily movable asset that can be exchanged for weapons, patronage or political leverage.
Ethiopia: Gold at the Crossroads of Insurgency and Smuggling
Ethiopia’s gold sector remains the country’s top mineral earner, generating USD 408 million in 2023/24, according to the Ministry of Mines. Yet official exports have collapsed—from 12 tons in 2011/12 to 4.2 tons in 2023/24—even as MoM reports more than 500 tons of new deposits discovered in Benishangul-Gumuz, Oromia, Gambella and Tigray.
This widening gap between geological wealth and official revenue reflects a deeper reality: the country’s richest gold belts are also some of its most unstable.
In Oromia, the Guji Zone—particularly Shakiso, Adola and Megado—hosts both MIDROC’s Lega Dembi operations and extensive artisanal mining. These areas lie in the heart of the Oromo Liberation Army (OLA) insurgency.
Local officials and miners report that OLA influences movement, taxes traders and disrupts extraction in parts of West Wollega and Kellem Wollega. Gold extracted in these zones often travels through clandestine routes rather than the formal system, feeding into a parallel economy that is increasingly resistant to central oversight.
The situation is similarly volatile in Benishangul-Gumuz, where districts such as Metekel, Kamashi, Dibate and Mandura hold substantial alluvial reserves. These areas have endured repeated outbreaks of violence involving Gumuz militias, ethnic armed groups and federal forces.
Competition for gold pits frequently sparks clashes, and the Ethiopia Ministry of Mines acknowledges that several mining cooperatives have been attacked or forced to suspend operations due to insecurity. Here, gold is both an economic lifeline and a flashpoint for local grievances.
Further north, in Western Tigray, areas around Tsegede, Welkait and the Shire–Adi Hageray corridor remain tense and contested. A post-war security vacuum has allowed informal extraction and trafficking networks to flourish.
Gold from these areas is believed to move toward Sudan and onto Gulf destinations, a pattern consistent with Swissaid’s 2024 Africa Gold Report, which highlights the surge of Ethiopian gold entering the UAE through indirect routes.
In Gambella, artisanal mining in Lare and Jikawo overlaps with cross-border militia activity from South Sudan, making the region a significant transit point.
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Meanwhile, at Kurmuk on the Ethiopia–Sudan border, a major industrial project has been repeatedly disrupted by armed groups operating on both sides of the frontier, according to MoM.
Across all regions, Ethiopia’s gold overwhelmingly ends up in one destination: Dubai. UN Comtrade data shows that the UAE receives the vast majority of Ethiopia’s declared gold exports, and informal flows are believed to be far greater. Traders and smugglers alike calibrate their pricing to Dubai’s refiners, not Ethiopian state controls—cementing the UAE as the economic hub for Ethiopian gold.
Sudan: Gold as the Lifeline of a Brutal Civil War
Sudan’s gold sector, devastated by conflict yet still functioning, underpins the financial capacity of both warring parties. SMRC reports 74 tonnes of gold produced in army-held areas in 2024, and 53 tonnes during the first nine months of 2025, with over 91% coming from artisanal miners.
These numbers do not include production from territories controlled by the Rapid Support Forces (RSF)—the dominant paramilitary force in Darfur and Kordofan.
The most notorious example is Jebel Amer in North Darfur, one of Africa’s richest gold deposits. The UN Panel of Experts on Sudan has repeatedly documented RSF influence over Jebel Amer and surrounding areas including Saraf Omra, Kutum and Kabkabiya, where RSF units tax miners, control access roads and manage logistics. These zones have become integral to RSF financing, providing the liquidity needed for arms procurement and recruitment.
In South Kordofan, gold belts around Talodi, Kadeer, Rashad and Abu Jubaiyah lie along shifting frontlines between SAF, RSF and local armed actors. Violent confrontations frequently coincide with attempts to secure mining sites or enforce taxation. Gold is extracted under constant threat, and miners regularly flee advancing forces or predatory militias.
Border areas of Blue Nile, such as Kurmak and Geissan, see similarly contested extraction, with multiple groups seeking control of mining clusters and smuggling routes.
Further north, along the Wadi Halfa–Abri corridor, gold smuggling into Egypt is widespread. Much of this gold eventually reaches the UAE, reappearing in import data as Egyptian exports, according to UN Comtrade.
Even the capital was not spared: in 2023, RSF fighters seized the Sudan Gold Refinery in Khartoum, taking roughly 1.3 tonnes of stored gold, according to the UN Panel of Experts. This dramatic incident underscored the degree to which gold is directly entangled with Sudan’s war economy.
Sudan’s reliance on the UAE is absolute. UN Comtrade data shows the UAE imported roughly 29 tonnes of Sudanese gold in 2024, and almost 97% of official exports go there. Smuggled gold adds significantly to this figure.
When tensions escalated between Khartoum and Abu Dhabi in 2025, restrictions on gold flows immediately triggered a sharp depreciation of the Sudanese pound—demonstrating the fragility of Sudan’s dependence on a single export corridor.
Why Dubai Matters—and Why Investors Should Be Cautious
Whether extracted from conflict-affected pits in Guji or RSF-controlled shafts in Darfur, gold from both Ethiopia and Sudan converges in the UAE, which serves as the global gateway for African artisanal gold.
Swissaid notes that more than 400 tonnes of undeclared African gold reached the UAE in 2022. In effect, Dubai provides the pricing mechanism, liquidity, and the refining capacity that sustain both countries’ gold sectors—legal and illegal alike.
This creates profound risks for investors and refiners. In Sudan, gold directly finances the civil war. In Ethiopia, gold indirectly fuels insurgencies and local power struggles by providing revenue streams for armed actors.
Environmental liabilities, especially around Lega Dembi, expose investors to ESG scrutiny, and complex smuggling routes raise sanctions and compliance vulnerabilities. Moreover, sudden shifts in Gulf policy—as seen in 2025—can collapse entire supply chains overnight.
As the night grew late and the club began to thin out, Khalid and Abreham wrapped up their conversation near the dimly lit exit. Khalid typed his WhatsApp number into Abreham’s phone, promising to follow up once he had a clearer picture of “who controls which routes” near the border.
Abreham shook his hand firmly.
“Good luck, my friend,” he said, knowing well that Khalid’s quest would take him deep into the informal supply chains that stretch from Ethiopia’s conflict-affected gold fields to the markets of Dubai.
With that, the two men stepped out into the cool Addis night—each walking away with a different interpretation of what opportunity and risk truly meant in the Horn of Africa’s booming gold economy.
ARC’s Advisory Value
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