July 19, 2024

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Ethiopian ministry of mines

Mining Sector of Ethiopia Fails to Achieve the Target

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The mining sector of Ethiopia had planned to generate $4.2 billion in revenue over 6 years. However, it has only achieved 29% of this target so far. From 2010 to the first quarter of 2016, the actual revenue collected was only $1.2 billion, well below the annual $4.2 billion goal.

The Federal Auditor General’s report found that the Ministry of Mines has not properly implemented a mineral resources development policy that has been in place for over 50 years. Additionally, 9 companies granted permits to produce and process coal as a substitute for imported mining materials have not implemented these projects as planned.

The National Bank of Ethiopia has also reported instability in the amount of gold it purchases from companies and traditional gold suppliers over the past several years, up to the first quarter of 2016.

Interestingly, at the start of this month, the Ethiopian Ministry of Mines claimed to achieve 75% of its annual gold export target during the first nine months of the current fiscal year. Minister of Mining, Habtamu Tegegn, revealed that the country exported over three tons of gold during this period, showing a 12.6% increase compared to the same period in the previous year. Read More…

Furthermore, at the end of March 2024, the National Bank of Ethiopia warned about the illegal trade of gold. Faqadu Dgafe, Deputy Governor and Chief Economist of the National Bank of Ethiopia (NBE), said yesterday that the bank could not collect 100 kg of gold this month. He said that since the start of this year, NBE has not been able to collect more than 100 kg of gold every month from traditional gold producers and small associations.

Overall, the mining sector of Ethiopia has significantly underperformed compared to its ambitious revenue targets, due to a combination of policy implementation issues, project delays, and volatility in gold purchases. The government will need to address these challenges to unlock the full potential of the country’s mineral resources.