The National Bank of Ethiopia (NBE) said that it could only purchase 2,684 kilograms of gold out of the planned 10,000 kilograms during the past nine months of the current fiscal year.
According to the bank, the volume of the gold it purchased from artisanal miners and the country’s sole industrial manufacturer- MIDROC Legedenbi mining company has shown a 62.5 percent decline compared to the same period last year.
The Ministry of Mines has indicated that only 2.68 tons of gold was produced by traditional gold miners and the MIDROC Legedenbi mining company in the current fiscal year.
Fikadu Dgafe, the Bank’s Deputy Governor and Chief Economist, stated that smuggling was a challenge and urged everyone to be vigilant. This was reiterated by Million Mathewos, the State Minister of Mines, who stated that the decrease in gold production was not due to security issues in the country, but rather the illegal smuggling trade. He noted that Regional States had not been properly regulating the licenses they issue to gold producers.
According to Fkadu Dgafe, NBE is taking steps to incentivize legal business by offering a 35 percent increase in purchase prices. On the other hand, a new Mining Proclamation has been drafted and submitted to the Council of Ministers by the Ministry of Mines to address bottlenecks that occur in the production of major mineral resources, including gold.
Ethiopia earned USD 560 million from gold during the 2021/2022 fiscal year. Gambella, Benishangul Gumuz, Oromia, and South West Ethiopia are known for their gold resources. Gambella Regional State’s Akbobo narrow greenstone sub-belt is labeled a high potential target for gold exploration by the Ministry of Mines. Reports indicated that one of the major Regional States which was rich in gold, Benishangul Gumuz, had already registered low income from gold during the first nine months of the 2022/2023 fiscal year when compared to the same period last year.
Government says Mining Sector Expanding
On the other hand, the Ministry of Mines says that during the first nine months of the current Ethiopian fiscal year, the country granted investment licenses for 15 foreign and 29 domestic companies that would participate in the development, exploration, and production of minerals, the national news agency ENA reported.
The country also generated USD 172.25 million from its mines export trade. The majority of the revenue, 150.6 million USD, was generated from gold exports. In her performance report, Messeret Nigussie, the Ministry’s Strategic Affairs Executive Officer, stated that Ethiopia produced 2.68 tons of gold, 255.7 tons of jewelry minerals, and 164.5 tons of tantalum during this period.
As to ENA’s report, the mining sector has provided employment opportunities for over 146,784 citizens during the first nine months of this fiscal year.
Habtamu Tegegn, the Minister of Mines, emphasized that the government was committed to developing the sector to increase foreign currency revenue and create more job opportunities.