Tuesday, May 21, 2024
BusinessGold exports dropped 59% to 3-year low

Gold exports dropped 59% to 3-year low

One of Ethiopia’s major exports, gold, generated close to USD 117.4 million in exports during the first six months of the existing fiscal year, according to the Ministry of Mines.

With changes initiated by Hailemariam Desalegn and sustained by Prime Minister Abiy Ahmed (PhD), gold was the best-performing export commodity, along with coffee and horticulture.

Takele Uma, who was appointed minister of mines, has been lauded for achieving a historic high in the mining industry, with gold exports exceeding USD 672 million two years ago. Under the minister, gold exports skyrocketed by 242 percent in 2020/21.

Even though industry insiders believe that the coronavirus pandemic, which hampered the black market, helped the country register a remarkable performance in the gold sector in the last two years, has returned the sector to the situation it was in before the outbreak made this unsustainable.

During his appearance before the Parliament last month, the Governor of the central bank, Yinager Dessie (PhD), admitted that contraband is once again presenting a danger to the mining industry. Takele shared similar concerns during his latest press briefing last week at the premise of the Mining Ministry.

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“A large volume of gold extracted from Ethiopia is being smuggled,” said Takele, affirming efforts are being exerted to discourage contraband. “We are forming a taskforce to take corrective measures.”

Reports state that artisanal miners conducted transactions totaling six billion birr over the course of the last six months. The miners claim that they are using the cash to purchase gold, which they then sell to the central bank.

On the contrary, the quantity that they have really sold to the central bank is just a third of this total, which raises the concern that the money may have been used to finance the smuggling of gold.

In the last six months, according to Takele, 1,910.5 kg of gold were mined, or 39 percent of the target. The same month’s earnings are also less than half of what was expected for the reporting period, which stood at USD 306.8 million.

Switzerland is the destination of more than 99 percent of the gold exports from Ethiopia.

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