The mining sector has been underpinning the Ethiopian economy for decades. Several precious minerals are being extracted via traditional and modern ways in different parts of the country.
Gold is one among the many mineral resources the nation is yet to exploit fully.
How much is Ethiopia blessed with yet extractable wealth of gold? How is the gold trading system is practiced in the country? What are the challenges hampering gold utilization? What should the government and pertinent stakeholders do to ensure legal, transparent and modern way of trading system?
Ethiopians have been extracting gold since ancient times. The Aksumite Empire used to mint gold coins and the precious mineral was one of its major export items. Gold has continued as an important export commodity till this time. However, due to many factors, the nation is yet to maintain sufficient economic benefits from gold mining.
To ensure proper extraction and transaction, the Ministry of Mines and Petroleum has urged stakeholders to exert maximum efforts to combat contraband and help the nation circumvent other illegal gold trading setbacks.
Assefa Kumsa, State Minister of Mines and Petroleum says that challenges which have been hindering gold production and transaction were identified and rigorous action is needed to address them starting from zonal level.
“Since the onset of this fiscal year, the income being maintained from gold has nosedived,” he said. “Illegal trade, contraband and anomalous transaction chain are among the challenges which are affecting the sector. Hence, launching modern production mechanism and implementing transparent and feasible supply and transaction chains would be highly important to address the problems from the grass root level,’’ the state minister insists.
Many gold producers extract gold in a traditional way. Thus, organizing and empowering them to produce legally and helping to get the deserved price will have massive impact in changing the life of low-income livelihoods.
Besides, ensuring security and infrastructural developments in a sustainable manner will be additional prerequisites to maximize an income that could be generated from gold, according to him.
Meanwhile, Benishangulu-Gumuz is one of the gold resources blessed states in Ethiopia. Getachew Alene, Expert at Benishangul-Gumuz Mining Development Agency states that the amount of gold being supplied to the National Bank of Ethiopia is decreasing from time to time.
Production is snowballing since producers have started using gold detector machine, Getachew highlighted. But, he regretted the ever-increasing smuggling of gold to Sudan through Kumuruk and Almahal routes is hampering the government’s effort of getting the deserved-level of income from the sector.
Black market, contraband and other illegal activities are the main factors blamed for affecting gold produce in the state, the expert points out. “The National Bank had a trend of purchasing setting 150 gram of gold the lower limit. However, it has revised its policy and it has shifted the lower bound to 50 grams. This would play a pivotal role in encouraging producers and combating illegal trading.’’
In addition to this, the Benishangual-Gumuz government has vowed to tackle illegal gold trading through implementing strict controlling mechanisms and creating awareness among associations and individuals who get engaged in gold -mining activities.
If proper utilization mechanism is implemented, Ethiopia could generate adequate income from gold mining. Thus, illegal practices and other challenges should be addressed. Accordingly, the government, associations, companies and individual producers ought to strengthen their cooperation on developing the sector.
The Ethiopian Herald January 19/2020
BY TSEGAY HAGOS
