According to reports by the Ethiopia Ministry of Mines Ethiopia generated a revenue for more than 303 million USD in the past five months illustrating the growth that Ethiopia has been experiencing in the mining sector due to a rise in the price of gold. The ministry made a revenue of 207 million USD at the same time last year.
Gold accounts for 90 percent of Ethiopia’s mining exports. This increase was facilitated by government policy overhauls and border closures due to the pandemic, making gold one of the few products to benefit from COVID-19 measures. Some of the measures include the mitigation of inefficient mining plant operations, infrastructure development, and stricter policies regarding contraband.
Kaleyesus Bekele, a mining expert, says that the border closures due to COVID-19, forced illegal traders that relied on smuggled foreign exchange, to transact directly with the National Bank. The new dynamic gave the bank time to implement measures to prevent traders from going back to illegal trading when the borders reopened and this in turn is credited for the dramatic increase in gold revenues.
Ethiopia’s gold sector is key to the nation’s mining industry. Gold accounts for 83 percent of the total mining output. The majority of the production, however, comes from the informal sector, largely from the more than 350,000 thousand artisanal gold miners.
Mining Minster Takele Umma and other experts within the industry affirm the need to transform the sector from small and medium scale to large scale production. The government is currently offering investors incentives like 25 percent corporate taxes, and schemes to carry forward 10 years’ loss.