Whilst engaged in and exerting maximum effort in the law enforcement and sovereignty marching, Ethiopia as a nation has registered remarkable achievements during the past fiscal year in the economic sector in which the mining sector contributed much. The reform tasks that have been undergoing in the mining sector brought better out comes and the economic gains that have been witnessed proved this.
Tackling the problems that hampered productivity of the sector enabled to raise the income obtained from the sector particularly from the gold mine sub sector.
During the budget year, the mining sector registered better plan accomplishment in earning foreign currency. Government organs, from the Ministry of Mining and Petroleum up to the regional offices and the lower rank level, played pivotal role in this regard.
Even though the out brake of COVID 19 had a deterrent effect on economic activities all over the world including Ethiopian, encouraging results could be registered on the export front through the efforts exerted by the federal and regional governments. Among the regional governments Oromia achieved exemplary results.
According to Tesfaye Megersa, Oromia Regional State Mining Development Authority Director, the authority planned to earn 86 million Dollar by exporting mine and other aesthetic minerals for the 2020/21 budget year, but through concerted efforts, it could be able to earn 292 million 500 US Dollar which is more than 340 percent of the plan.
As compared to the preceding budget year, this budget year’s income increased by threefold. The supply of huge amount of gold to the National Bank and the better price offered by international market contributed for such encouraging accomplishment.
Following the out brake of COVID-19 in the world, many countries were forced to close their borders. The situation put pressure on traders hence, instead of trafficking huge amount of gold and other minerals which have aesthetic values illegally to the neighboring countries, they supplied to the National Bank which in turn played positive role for the better foreign currency garnering.
In relation to gold mine, in the reported budget year, it was planned to supply 2500kg of gold to the National Bank from gold mining associations but through diligent work, it was possible to supply 2800kg.
On the other hand, though some association gave up their engagement in exploiting gold due to various reasons in the last quarter of the year, new comer associations joined the sector could be able to supply one thousand kg of gold to the National Bank. Totally, during this budget year 3800 kg of gold mine is supplied to the National Bank. Apart from gaining the royalty fee from gold production, it was possible to obtain 110 million Birr as domestic revenue from income tax, he said.
By the same token, the Director further said thatduring the budget year, it was planned to create job opportunities to 115 thousand people in the mining sector but the achievement was 25 percent shortof the plan. It was able to create 86 thousand 594 jobs. That means 75 percent of the plan was achieved. Due to the delayed inceptionof the businessby the private companies in the sector the achievement is below the plan.
With regard to license provision, it was possible to issue license to the miners from the higher level to the lower level enterprises for exploration and extraction of minerals. As a result, it was planned to issue 1800 license during the budget year, but it was achieved more than the plan by issuing 1954 licenses. In general, the plan accomplishment at the regional level could be said encouraging. Transparency in the issuance of the license played crucial role for the better accomplishment, he noted.
As per the right effort from the government side in promoting the sector and high demand to utilize the natural resources, the mining sector’s achievement of the region can be said better as compared to the previous budget year. To this end, many studies and researches have been conducted to boost the resource exploitation, he said.
“At the national level,” the director said: “The government paid great attention to strengthen the sector and relevant institutions are established and sufficient budget is allocated. In addition, awareness creation work to the society is highly promoted. The mining business cannot be performed unilaterally; rather it needs the support of other stake holders therefore advertising the sector’s activity is vital. Working with cooperation of small and medium size enterprises brought a positive impact in raising the sector’s foreign currency earning capacity.”
According to experts, Ethiopia has abundant national resources including various types of minerals but due to the limited capacity of the nation in terms of finance, technology, and qualified human resources, the resource is under exploited. Even though the government began to pay more attention to the sector recently, much effort is needed to enhance production and productivity.
Documents also indicate that Ethiopia has abundant gas and petroleum resources in the Somali region. Exploring of the resource had begun during the imperial era in the 1950s and 60s. That time the American company known as TENICO was engaged in exploring the resource but its endeavor ended up in vain by unknown reason. In 1980s during the Dergue regime, the Soviet Union oil exploring company had engaged in exploring the resource but it met similar fate to the American company.
Currently, however, it is said that Chinese company is trying its level best to exploit the natural gas where exploration is underway in the same region. According to the information obtained, stretching underground tubes in which the natural gas passes through from the area to port of Djibouti for refining is underway with the expectation of ultimate outcome of the production to be publicized. The delay observed in this regard indicates that how the nation is lagging behind in utilizing is mineral resources when compared to other countries.
On the other hand, traditional mining of gold carried out by individual miners and associations in the Beneshabgul gumuz State and Shakiso areas of Oromia State has been increasing. The traditional miners’ associations contribute significant role in supplying their products to the National Bank. Such effort must be encouraged. It is also known that, there are various minerals available in Amhara region but due to various reasons it is not properly exploited. Some minerals are exploited illegally and traded to the neighboring countries and such practice has a negative impact on the nation’s economy. Hence, halting the practice by regional officials must be a priority agenda for both the regional and federal governments, the director underscored.
BY ABEBE WOLDEGIORGIS
THE ETHIOPIAN HERALD SEPTEMBER 7/ 2021
