Ministry of Mines, Petroleum and Natural Gas (MMPNG) revealed that it is undertaking various steps to shore-up declining performance and foreign currency earnings by bypassing the various bottlenecks facing the sector.
Director of Public Relations and Communications Affairs at MMPNG stated that the Ministry has racked up more than 656 million USD in foreign currency earnings in the two years and nine months period of the GTP II, although it could not meet the goals set in the plan.
Mentioning that close to 2.5 billion USD were gained within the five years of the first phase of the GTP (GTP I), the Director indicated that the volume and, consequently, hard currency earnings from the sector has declined in the past few years due to various factors.
Mikael said that one of the factors for the low performance lies on the failure to give sustained support to the traditional (artisanal) miners. The other reason he mentioned has to do with illegal trade. Further explaining, he pointed out that because the banks do not reach out to the producers, and since the minimum gram that National Bank of Ethiopia (NBE) buy from gold miners is 250 gram whilst those involved in illegal trade buy up even the smallest grams, and it has encouraged illegal trade (contraband) and smuggling to flourish.
Also, he mentioned the country’s instability for the past three years has also contributed for the low performance of the sector.
To solve the aforementioned and other bottlenecks, and shore up the performance of the sector, the Ministry is undertaking many tasks.
According to him, one of those works being undertaken relates to giving training to traditional miners, and providing them the equipment to increase their productivity. Also, expanding banking service into every corner and remote areas where miners produce, and identifying new mining sites and bringing in new investment are also some of the initiatives the Ministry is undertaking to improve the sector’s output.
Further, Mikael said that due to the fact the issue of hard currency is improving these days, which reduced the rate of exchange between the formal and black markets, the amount of products already supplied in these past few days have been hugely increased. “The amount of products supplied in these past two weeks has been more than we have had in months.”
In addition to the attractive incentives the sector provides to the private sector and foreign investors, as per the Director, the fact that the minimum gram NBE accepts is lowered to 50 gram from 250 gram, is expected to help spike the gold production, which has shrunken due to the international market price decrease.
Aweke Tesfaw, Public Relations and Communication Officer with the Ministry, for his part said that while the country’s gold output has decreased due to international market volatility, newly discovered precious stones are bringing in huge amount of hard currency for the country. Ethiopia has earned up to 30 million USD from newly discovered precious stones like Sapphire, Emerald, and Ruby in the past two years, he added.
Given that they can compensate for the loss of revenue from gold, Aweke said that huge promotional works are being done as they are new to the country, where importers are made to promote the products in foreign countries. As a result to this, “we are getting positive results, and helping the country gain revenue,” Aweke noted.
According to various reports, the Ethiopian government has recently revealed the addition of natural gas as one of the major export commodities in the near future, with the Ministry of Mines, Natural Gas and Petroleum revealing in April this year that the country is planning to generate close to 1 billion U.S. dollars on annual basis from the export of the recently discovered natural gas.