The National Bank of Ethiopia is revamping its gold buying scheme to combat a decline in official gold supplies. The bank announced significant price hikes for suppliers, hoping to stem the flow of gold into the black market.
Under the new plan, effective June 17th, 2024, suppliers will receive a 72% premium above the global market price for deliveries exceeding 30 kilograms. Those bringing in 3.01 to 30 kilograms will get a 67% premium, while smaller quantities between 50 grams and 3 kilograms will receive a 60% markup.
These changes address longstanding issues in Ethiopia’s gold sector. The National Bank acknowledged that previous incentives were insufficient, leading to gold being smuggled out instead of entering official channels. Governor of the National Bank, Mamo Mehretu, specifically noted a recent drop in submissions despite ongoing gold production. This decline in official gold has significantly impacted the country’s foreign exchange earnings, falling short of projections set by the Ministry of Mines.
Ethiopia previously earned over USD 600 million annually from gold, but those figures have dwindled in recent years. The hope is that the new, more attractive incentives will entice suppliers back into the official market, boosting foreign currency earnings for the country.
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