30/09/2026
THE CASE FOR ARTISANAL MINING COOPERATIVES AS A MEANS OF WEALTH CREATION IN KARAMOJA
By One Direction Institute (ODI)
From poverty interventions to productive community ownership
For decades, Karamoja has attracted substantial government programmes, humanitarian assistance, livelihood projects and development interventions. Yet the region continues to face some of Uganda’s most severe levels of poverty and deprivation.
The latest evidence should force a rethink. According to the Uganda Bureau of Statistics, Karamoja had an income poverty rate of 74.2% in 2023/24, the highest among Uganda’s sub-regions. The region also recorded the country’s highest multidimensional poverty index at 0.569, compared with 0.088 for Kampala.
This does not mean that previous interventions have had no value. Roads, schools, health facilities, social protection, agricultural programmes and humanitarian assistance remain important. But the persistence of poverty suggests that service delivery and poverty relief alone cannot transform the economic structure of the region.
Karamoja needs a stronger productive economy. One opportunity that deserves serious attention is formalised artisanal and small-scale mining organised through cooperatives.
From informal mining to community enterprise
Mining is already part of the economic reality of many communities. The question is not simply whether people should mine. The more important question is:
How can communities participate in mining legally, safely, productively and in a way that enables them to build lasting wealth?
Uganda's Mining and Minerals Act, 2022 provides an important foundation for this approach. The law specifically recognises artisanal mining and provides for artisanal mining licences. Cooperatives made up exclusively of Ugandan citizens are among the entities eligible to apply for such licences, with membership expected to include women and marginalised groups where applicable.
This is significant. Instead of thousands of individual miners operating informally with limited bargaining power, communities can organise themselves into formal mining cooperatives that can hold licences, establish governance systems, mobilise capital, acquire equipment, maintain records, negotiate with buyers and progressively improve their operations.
The cooperative therefore becomes more than an administrative structure. It can become a vehicle for community ownership of an economic asset.
THE KAKOKA EXAMPLE
The recent launch of Kakoka Artisanal Mining Cooperative Society Limited in Abim District, reportedly licensed as AML006644, provides an encouraging example of what formalisation can begin to look like.
The significance of Kakoka goes beyond the issuance of a licence. It demonstrates that artisanal miners can move from informality towards a more structured model based on licensing, compliance, collective organisation and responsible mining.
The cooperative has described the project as the beginning of a gold project in Abim focused on sustainable and responsible mining and value addition, with ambitions for further investment.
This is the kind of development that deserves to be studied carefully—not because one cooperative will solve Karamoja's poverty problem, but because it provides a potential model for organising local productive capacity around resources that already exist within the region.
WHY COOPERATIVES MATTER
An individual artisanal miner is often constrained by limited capital, technology, information and bargaining power. A cooperative can change that equation.
A well-governed mining cooperative can potentially:
• pool members' capital and savings;
• acquire shared mining and processing equipment;
• obtain and manage mineral rights;
• improve occupational health and safety;
• provide technical training;
• negotiate better terms with mineral buyers;
• maintain production and financial records;
• facilitate access to formal finance;
• invest part of its surplus in community enterprises; and
• progressively move from rudimentary extraction towards more productive operations.
Uganda's cooperative framework already recognises industrial cooperatives that can engage in natural-resource activities, including obtaining or providing equipment, contracts and management services for mining.
The opportunity, therefore, is to connect mineral resources, cooperative organisation, finance, technology and local enterprise development.
Mining should not simply mean selling raw gold
This is perhaps the most important part of the proposition. If Karamoja simply extracts minerals and sells them as quickly as possible, much of the economic value will continue to leave the region.
The objective should instead be to develop a local mining value chain. That could include geological services, equipment supply and maintenance, mining services, mineral processing, assaying, responsible mineral trading, transportation, financial services and, where economically and technically feasible, further value addition.
The Mining and Minerals Act itself identifies value addition and local growth across the mineral value chain among its objectives.
This creates an opportunity to move beyond a simple model where miners extract minerals and sell them to traders for external markets. Instead, Karamoja can develop a broader local value chain linking miners and cooperatives with processors, licensed buyers, financial institutions and local businesses, while connecting them to regional and international markets. That is where mining can become an engine for wider economic activity.
THE ROLE OF GOVERNMENT SHOULD CHANGE
Government does not necessarily need to become the operator of every economic activity in Karamoja. Its role can increasingly be to create the conditions under which communities can become productive economic actors.
That means simplifying and supporting formalisation, providing geological information, strengthening extension services, enforcing safety and environmental standards, improving roads and energy infrastructure, supporting access to finance, and ensuring transparent mineral markets.
The Mining and Minerals Act provides for artisanal mining areas and requires licensed operations to comply with environmental, occupational health and safety requirements.
This is important because promoting artisanal mining should never mean promoting unsafe or environmentally destructive mining. Formalisation must come with responsibility.
A NEW DEVELOPMENT PROPOSITION FOR KARAMOJA
The persistent poverty figures tell us something important: we cannot continue doing the same things and expect fundamentally different economic outcomes. Karamoja does not only need programmes designed to help poor households survive.
It needs mechanisms through which communities can own productive assets, accumulate capital and participate in markets. Artisanal mining cooperatives could form part of that strategy.
Imagine a model in which a mining cooperative starts with a small licensed operation, builds a savings fund, acquires shared equipment, receives geological and technical support, establishes proper environmental management, develops relationships with formal buyers and gradually reinvests its earnings.
Over time, the cooperative could become a platform for other investments: transport, equipment leasing, agricultural enterprises, housing, education, financial services and local businesses. The mineral resource would then become more than something extracted from the ground. It would become a source of community capital.
The case for a Karamoja Mining Cooperative Development Programme
One Direction Institute believes there is a strong case for exploring a dedicated Karamoja Artisanal Mining Cooperative Development Programme bringing together miners, cooperatives, government, financial institutions, technical institutions, responsible investors and development organisations.
Such a programme could focus on five areas:
1. Formalisation
Help existing miners organise into legally recognised cooperatives and obtain the necessary licences.
2. Capital and equipment
Develop appropriate financing mechanisms for productive mining equipment rather than simply providing consumption-oriented support.
3. Skills and technology
Build local capacity in geology, mine management, processing, occupational safety, environmental management and financial management.
4. Value addition and markets
Connect cooperatives to transparent mineral markets and explore commercially viable local processing and value-addition opportunities.
5. Community wealth building
Encourage cooperatives to save and reinvest a portion of their earnings into productive community assets and diversified enterprises.
This would represent a significant shift in development thinking: from repeatedly financing poverty to helping communities build enterprises capable of generating wealth. A resource-rich region should be enabled to build from its resources
Karamoja's development challenge is complex. Mining alone will not eliminate poverty. Agriculture, livestock, education, healthcare, infrastructure, social protection, tourism and other sectors all have important roles to play. But development policy should not ignore an economic activity that already exists.
The opportunity is to formalise it, make it safer, make it more productive and ensure that a greater share of the value created can remain within local communities.
The launch of Kakoka Artisanal Mining Cooperative in Abim should therefore be viewed not simply as another licensing milestone, but as an opportunity to ask a bigger question:
Can artisanal mining cooperatives become vehicles through which Karamoja's people move from being recipients of development interventions to owners of productive enterprises?
That question deserves serious policy attention.
For Karamoja, the next chapter of development may require fewer programmes designed merely around what can be given to communities, and more economic institutions designed around what communities can own, produce, save, invest and build.
One Direction Institute believes this is a conversation worth starting.
