The annual gold supply from Southwest Ethiopia to the National Bank has experienced a dramatic drop, plummeting from 800 kilograms to just 90 kilograms, according to G/Mariam Setegn, Director of the region’s Minerals and Energy Agency.
Historical Overview
Between 2007 and 2023 (2000 to 2015 E.C.), the National Bank received substantial gold deliveries from Southwest Ethiopia. Notably, in 2009 and 2011 (2002 and 2003 E.C.), the region supplied up to 800 kilograms of gold each year. However, this level of production has sharply declined in the past two years, with annual gold deliveries not surpassing 90 kilograms.
Reasons for Decline
G/Mariam Setegn has clarified that the decrease in gold supply is not attributed to a reduction in gold production. According to discussions with producers and suppliers, gold output remains consistent. The primary issue is the rise of illegal gold trading in the region.
Illegal buyers have been offering significantly higher prices—up to Birr 1,000 per gram—compared to official channels. This has incentivized gold suppliers to sell their gold through unofficial means, diverting it away from the National Bank.
Impact of Modern Equipment and Regulatory Challenges
Despite the introduction of modern equipment, including metal detectors and washing machines, these measures have not alleviated the decline in official gold supply. The main challenge remains inadequate regulation and enforcement, which has allowed illegal trading to flourish unchecked.
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Conclusion
The drastic reduction in gold supply to the National Bank from Southwest Ethiopia highlights a pressing issue in the region’s gold trading practices. With illegal traders offering more competitive prices, official channels are struggling to maintain their share of the market. Addressing the regulatory and enforcement gaps will be crucial in reversing this trend and ensuring that gold production continues to benefit the National Bank and the broader economy.