The Joint Committee of the Ministry of Mines (MoM) and the National Bank of Ethiopia (NBE) have decided to adjust the gold premium paid on artisanal gold from 29% to 35% and changed the segmented procedure to a flat structure, Takele Uma, the Minister of Mines and Petroleum, twitted on June 22.
Two pieces of gold bars with the same amount of gold in them could cost different amounts. This is explained by the difference between the selling prices of the bars and the value of the metal they contain, or in short, the premium paid on their purchasing prices.
Abebe Senbete, NBE Currency Management Director, told ENA that this act is being carried out to obtain the desired foreign currency from gold by encouraging the artisan suppliers. The measure was effective when previously applied, he added and resulted in an increase in earnings of about 1.2 billion USD. Income from gold in the last 10 months has been the second-highest among Ethiopia’s export items, and this new incentive may boost its proceeds yet again.
BIE graph depicting 50 years Global Gold Price.
Vice Governor and Chief Economist of the NBE, Fikadu Digafe, further detailed that this new incentive will be based on a flat rate, meaning that the premium paid will be the same starting from a minimum of 50g, instead of following the previous practice of paying a higher premium for larger quantities.
Addis Ababa, Ethiopia (23 June 2022)
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