ADDIS ABABA – Ministry of Mine and Petroleum of Ethiopia said that the mining sector, which is critical to the realization of the homegrown economic reform, is on the right track despite the coronavirus pandemic.
Ethiopia is working on expanding modern mining operations to save the mining resource from extravagance, according to Ministry of Mines and Petroleum.
Ethiopia has diverse and huge untapped mineral resources. This promising potential coupled with improving government policies and regulations has helped the country to earn the needed revenue from the sector. As the country has a huge potential opportunity for exploration and development of a variety of minerals gold, tantalum, potash, platinum, copper and others, the mineral potential of the country is not yet fully explored.
Ministry of Mines and Petroleum Trade Certification Director Betru Haile, told The Ethiopian Herald that the mineral export performance has improved due to various factors including the measures taken by the National Bank of Ethiopia (NBE). The Bank has made adjustments on the price of gold it purchases from traditional gold miners and traders. The price adjustment made by the bank has motivated the local gold producers to sell gold to the NBE, Betru said.
The primary thing for the improvement of the sector is directives given by the bank. In addition to world gold price increment, border closure due to the coronavirus pandemic is among the factors which contributed for the sectors performance apart from the directives from the government. Ethiopia closed its borders with neighboring countries to curb the spread of the pandemic.
To some extent the border closure has weakened the illicit gold trade that posed a major threat to the sector, and the closure of border forced illegal traders to join the legal market. The traders are looking for black market rather than retailing their product to the national bank of Ethiopia as the illegal traders provide high price for them. By considering this the bank adjusts price related to the black market. This will directly increase the amount of gold being sold to the bank, he noted.
The promising raise of revenue earned from the sector is the result of the reform and directives from the government. Following the directives from the government most of the mining producers are vending their product to the National Bank of Ethiopia. This will directly reduce illegal smugglers of the product.
The ministry is working to improve the mining sector performance in collaboration with different organizations so to modernize the mostly traditional mining sector that has been incurring huge loss. The ministry is doing its level best to implement projects which are based on scientific knowledge and increase productivity.
There are different problems which contributed for the loss of revenue of the mining sector. Illegal smugglers, remoteness of most of sources of mining products and lack of access to transportation, water, health, education and other social facilities in those areas make the situation difficult for producers.
Lack of technologies while extracting the resources, lack of technical as well as financial support for traditional mining extractors, and illegal mining are said to be some of the major problems observed in the sector. On the other hand there is also lack of incentives from the government, limited market access, and unable to add value to the products are also among the bottlenecks recognized by the corporation.
By considering this, the government launched a directive which helps to improve the performance of the sector. Now the National Bank of Ethiopia is buying the product from the producer’s directly. Last year, the ministry collected revenue of 49.8 million USD. This year for the past nine months the ministry collected over 35.5 million USD from all mining, Betru says.
Artisanal miners generate millions of dollars from the export of gold annually. Those artisans operate mainly in five regional states-Tigray, Oromia, Benishangul, Gambella and Southern Regions. But the miners have started supplying gold to the Bank after it established a gold purchasing center in these regions.
Mineral export is one of Ethiopia’s major foreign currency earning. The country’s revenue earned from the sector during the past nine years has been declining slowly. But, in recent years the revenue earned from the sector showed some improvement as the ministry earned more than 208.12 million USD from gold export, contributing the lions share, he indicated.
Herald August 1, 2020
BY HAILE DEMEKE
