Ethiopia's gold exports experienced a significant slump over the past fiscal year, dropping more than twofold according to official figures. However, government authorities remain optimistic that exports will rebound and posts stronger growth in the year ahead.
Export revenues from gold, Ethiopia's most important mining product, totaled just $250 million in the last financial year. This marked a sharp decline from over $546.5 million earned in the previous 2021/22 fiscal year.
The growth of illegal smuggling operations draining supply from regulated trade channels was blamed for undermining formal exports.
While last year's slump was noteworthy, Ethiopian authorities still foresee improved performance for gold exports going forward. State Minister of Mines Million Mathewos stated that recent measures taken to "crack down on contraband activities will help address the root causes of the prior year's shortfall."
"Beside arresting 52 foreigners participated in smuggling activities, we have taken administrative and legal measure against those in the smuggling operations," said Million.
Legal exports are expected to increase as more artisanal production is captured within the formal sector.
Additionally, the Ministry of Mines believes the central bank's decision to raise domestic gold purchase prices above international market rates will incentivize more mining output.
If successful, this policy aims to boost foreign exchange proceeds that dipped due to weak exports over the past 12 months.
"We are already seeing change from the central bank reform," Million said.
The central bank pays artisanal miners a price that is "80 percent higher than the international market price" in order to offset losses from selling into legal markets.
