Monday, January 26, 2015

Can Ethiopia’s Resource Wealth Contribute to its Growth and Transformation?

(Jan 26, 2015, (ADDIS ABABA))--Ethiopia has averaged a 10.7% economic growth rate over the last 10 years, more than double the annual average of countries in Sub-Saharan Africa, which was around 5.2%.

However, despite having a huge potential to contribute to Ethiopia’s economy, the development of oil, gas, and mineral resources are not among the key drivers of the country’s growth.  Although the country has geological potential for the discovery of new, sizeable oil, gas and mineral deposits, most of its extractive industry is still in its infancy stage.

Currently, there is one large-scale gold mine in operation, while a growing number of large mining projects are under development and exploration for oil and natural gas is intensifying after significant discoveries in neighboring countries. Ethiopia also has an extensive and unique artisanal mining sector; the government estimates there are around 1 million miners, making it an important source of job creation, and an important source of foreign currency.

"In 2012, the Ethiopian mining sector accounted for 19% of the country’s exports revenues- mainly from artisanally mined gold- while in comparison, coffee, Ethiopia’s largest export commodity, generated 26% in export revenues."
World Bank Group Washington, DC, 2014
Strategic Assessment of the Ethiopian Mineral Sector

The report notes that resource wealth can potentially have a positive impact on the social and economic development of Ethiopia if the industry is developed and managed in a sustainable and transparent manner, following international good practices. Read more the full story at  World Bank Group »

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