BY HIZKEL HAILU
Coffee is one of the leading foreign exchange sources among the other agricultural products for Ethiopia. Indeed, the country meets most of its foreign exchange needs from this coffee product. The export of hides and skins has also been among the country’s main source of foreign exchange next to the coffee product.
In addition to coffee, hides and skins, a gold mine has been a major contributor to the country’s foreign exchange earnings. Apart from gold, the country has also many precious minerals that can be raw materials for the industries. But it has not been able to earn as much foreign exchange as it should have due to the less emphasis the sector was given.
Since the reform, however, especially following the various reforms undertaken in the mining sector during the last three years, the country has earned more than it has earned from the mining sector earlier to the reform. Plus, the country is also working exhaustively to make sure that gold is additional back bone of the national economic growth.
On his parliamentary speech recently, Prime Minister Abiy Ahmed (PhD) said that the ongoing efforts to reform the leadership of the mining sector from the federal to the State level have greatly contributed to the current successful achievement of the sector.
Pointing out the country’s export potential has increased by 18 percent during the recently completed Ethiopian fiscal year; the Premier said Ethiopia has earned 3.5 billion USD from export trade for the first time in its history. Adding, the Premier said that the mining sector, especially gold, has made a significant contribution to the country’s foreign exchange earnings.
Minister of Mining and Petroleum, Takele Uma for his part stated the ongoing reform activities in the mining sector have been bringing a new direction to the country’s export performance and replace the imported goods that used to cost the country high foreign exchange. As to him, the new direction enables to reduce national expenditure as well as increase the national foreign exchange earnings.
According to the Minister, Ethiopia has earned 681 million USD from the mining products in 2020/21 Ethiopian fiscal year. Underscoring this laurel is the largest foreign exchange earnings compared to the last years’ performance; he explained his office has planned to do better than ever for the new fiscal year (2021/22).
According to Berhanu Denu (PhD), lecturer of economics at Addis Ababa University; the mining sector, gold mineral in particular, has become the second largest foreign exchange earner next to coffee. As to him, the government has improved the quality of previously wasted gold. The ability to control tax evasion and smuggling by some individuals and groups, made the sector major contributor to the country’s massive foreign exchange earnings.
Gold and other precious minerals are widely sought after by the developed countries. In this regard, it shows that the government has made its own efforts to find a market for its products. It is also believed that minimizing wastage and misusing of mines among some individuals is of paramount importance to produce and provide better products to the market.
If it is possible to control contrabandists who are weakening the sector and improving the quality of export gold, the country can also increase its export revenue as the price of such minerals is being increasing in the international market, he added.
As long as the country can provide better products in quality and quantity, it will have the opportunity to win the foreign market, Berhanu said. Adding to the point he mentioned the federal government is required to monitor and bring necessary machinery to increase production and improve the quality in the process of profiting from the mining sector appropriately. The government should also revoke the licenses of those who have not used for long period of time, he emphasized.
Owing to the fact that the mining sector is rife with corruption, the government needs to monitor it closely. It should also work ardently to benefit parts of the society who are living around the extraction sites of the mining products. Subsequently, it is important to support the community through fulfilling basic needs such as potable water, roads and other infrastructure, as well as providing training and hiring them.
On his speech, Abiy Ahimed further explained that efforts have been made to improve the foreign exchange investments, especially in mining sector particularly from exporting gold through changing leadership from the federal to the state level and introducing new practices. He said some regions have been able to increase the supply to more than 1,000 kilograms of gold to the National Bank of Ethiopia this year that was only 30 to 40 KG two years ago.
In this regard, Sidama Regional State is one of the regions in Ethiopia that is endowed with mineral resources which are significant inputs for the industrial and construction sectors. The regional administration is being managing its mineral resources through establishing its own mining and energy agency.
According to information obtained from the State’s Mining and Energy Agency, the state has performed better this year than last fiscal year in supplying gold to the National Bank of Ethiopia (NBE).
According to Mesfin Mechuka, Director General of the Sidama State Mining and Energy Agency, gold is one of the most precious minerals in the State. As to him, there are also other jewelry minerals including Emerald. However, it is expected that they will be marketed in the near future after studying their stock is over.
It was also learnt that Emerald is one of the gem varieties of the mineral beryl which is typically found in Colombia, Madagascar, Canada, Zambia and Brazil among other countries. Emerald can be found in a variety of rock types that include shale and limestone. Some studies also indicated that the mineral is found in Ethiopia in bulk amount.
These days, gold is produced in the region through traditional associations and the product is supplied directly to the National Bank. The bank receives the gold and presents it to the international market.
Accordingly, 14.99 kilograms of gold has been supplied to the National Bank of Ethiopia by eight traditional gold mining associations during the recently passed budget year. The performance is more than tripled when compared to the 4.3 kilograms of gold supplied to the National Bank of Ethiopia during the previous fiscal year, he added.
“It is expected that the region’s supply of gold to the National Bank of Ethiopia will improve as Sidama’s small-scale gold mining industry enters to the production. The agency is also working exhaustively via integrating the work of traditional gold miners with investors for better result in the sector. To this end, the associations have signed agreements with the investors and are making the necessary arrangements. This will allow more gold to be supplied to the National Bank,” he remarked.
According to the Director General, in addition to gold mining, there are associations in the region that produce industrial minerals such as “Talc and Kaolin” and started exporting their products last year. However, due to COVID-19 and other reasons, most of them have not been able to export this year. Mentioning these minerals are expected to be widely available in the future, he stated it could be able to export up to 10 tons of kaolin this year.
He further said that there are local factories that are accepting the” Talc, feldspar and Kaolin” minerals in the region. While mentioning quartz among the minerals which is being exported from the region, he clarified the agency has planned to conduct a study on emerald minerals in collaboration with the Ethiopian Geological Survey. The Sidama State is rich in sand, gravel, gemstone and other minerals, it was learnt.
THE ETHIOPIAN HERALD JULY 25/2021
