Ethiopia is endowed with a natural resource which comprises several precious minerals and natural gas reserves that could put for proper use to realize its renaissance. Especially, the huge natural gas potential would be exploited and exported when the necessary infrastructural developments are put in place.
In May 2019, the Ministry of Mines and Petroleum announced that British energy firm New Age (African Global Energy Ltd) has discovered 1.6 Trillion Cubic Feet of natural gas reserves in Ogaden basin, Somali State, Eastern Ethiopia.
However, since there are not infrastructural developments that could be used for exploiting and exporting the resource, there is a plan to actualize every necessary infrastructure and facility within two years, says Minister of Mines and Petroleum Samuel Urqato (PhD).
He adds that bilateral agreements will be signed with the company which is responsible to explore the natural gas reserve in the coming months to start expanding infrastructural developments.
‘‘The infrastructure expansion plan will be completed in the coming two years. By then, our country will start exporting natural gas from its natural reserve to the global market. Hence, a pipeline that would transport natural gas from Ogaden to the port of Djibouti will be built. Besides, refinery facilities will also be installed,’’ he states.
On February 2019, Ethiopia and Djibouti have signed agreement for installation of 760 kilometers gas pipelines that stretches from Calub and Hilal gas reserve areas in Ogaden to the port of Djibouti. Upon completion, the natural gas sector will significantly transform the agricultural items dependent on foreign trade.
‘‘Natural gas extraction needs cautious process and time. Having understood this, we are working to extract it in a modern and planned way,’’ he notes.
As to him, rules and regulations amendment is being undertaken so as to create favorable environment for investors who want to involve in the mining sector.
He adds that beyond oil and gas potential, the government has been tirelessly endeavoring to exploit the immense mineral resources to facilitate the fast economic growth which aimed at making the nation a middle income country by 2025.
Ethiopia is blessed with enormous mineral resources including sapphire, gold, tantalum, potash and many industrial minerals, the Minister explains. He adds that if the nation manages to exploit such resources, they would have pivotal role in sustaining the economic growth through creating jobs, expanding manufacturing and alleviating poverty.
As we have witnessed in many countries, oil and gas reserve have changed the livelihoods of many poor people around the world. Not only that, it has tremendously transformed their economy.
Samule Yitbarek, Economics Lecturer at Addis Ababa University reaffirms that exporting natural gas would massively rejuvenate the Ethiopian economy and it will lift millions of Ethiopians from abject poverty if it is utilized in a transparent, accountable and equitable way.
‘‘Over the last two decades, problems posing serious threats were corruption and mismanagement. When we see the experience of other countries such natural resources are highly vulnerable for mismanagement. Thus, the government and other pertinent stakeholders should work in an integrated way in exploiting it properly,’’ he points out.
To create equitable resource management, the lecturer recommends the government to revise rules and regulations that concerns the mining sector.
He adds that being dependent on agriculture products for several decades; the foreign trade will be highly transformed upon the exporting such valuable natural resources to the international market kicks off.
‘‘If we use it properly, it would be very important resource for our country. Besides saving foreign currency, it would maximize hard currency and revitalize the economy. It will significantly minimize the loan and grant dependencies. It would also be expected to create job opportunities for thousands of citizens. But basic infrastructure and other facilities should be installed,’’ he insisted.
With the involvement of foreign companies in the mining sector, that Ethiopia will be advantageous in technology, skill, knowledge and experience transfer, according to the optimistic lecturer.
As peace and stability are highly essential in harnessing mineral resources and nourishing economic growth, the federal and state governments should work to ensure sustainable peace and security, he underlines.
Ethiopia had been showing an incredible economic growth over the last two decades. This was confirmed by World Bank, IMF and other regional and international organizations.
Hence, the nation was hailed as one of the fastest growing countries in Africa without oil dependency. With the commencement of exporting natural gas, Ethiopia’s future is bright.
The Ethuiopian Herald December 1/2019
BY TSEGAY HAGOS
