The commodity has overtaken coffee as the Horn of Africa’s most valuable export, with earnings registered at $3.5 billion in its 2024/2025 fiscal year, even while large-scale operations reportedly underperform.
A quarterly Ministry of Mines report, released in November, revealed a paradox in Ethiopia’s gold industry: its top commodity is being driven, predominantly, by micro-operations.
According to the report, artisanal mining continues to outperform large-scale gold producers, with several corporations reportedly failing to meet targets even as favorable funding reforms emerge.
“Artisanal mining continues to thrive because of its flexibility and low entry barriers from using simple tools, local labor, and tapping into informal markets that offer quick cash,” says Lawrence Adu Asamoah, Research Economist at the African Center for Economic Transformation (ACET), to FORBES AFRICA.
He adds that Ethiopia’s large-scale producers are at the mercy of “technical and capital constraints intensified by a tight forex regime”, while “institutional bottlenecks”, such as slow licensing and environmental compliance, stall momentum.
As per The Reporter Ethiopia, YMG Gold Mining’s processing plant produced under 500 grams of gold in the first three months of the fiscal year, while Ezana Mining contributed just over 41 kilograms, over the same period. A combined 22kg in production were derived from two other large-scale operators.
With an economic revival agenda focused on maximizing gold production, this will likely be key a key factor as debt soars and inflation rises. The Birr also weakened by nearly two-thirds since late July, Bloomberg indicated in October.
This despite the Horn of Africa, as it is known, being one of the world’s fastest-growing economies and its GDP expected to almost double, International Monetary Fund data shows, from $109.49 billion in 2025 to a potential $217.93 billion by 2030.
Irmgard Erasmus, Senior Financial Economist at Oxford Economics, offered some insight on the conundrum.
“It is quite interesting that the improvement in the export position didn’t translate into birr reprieve. We believe that this is due to hard-currency purchasing pressures, with demand not being met at the official window,” she says.
Ethiopia’s silver lining will be the strength of its artisanal mining producers as gold exports rose from $409 million in mid-2024 to $3.5 billion last July.
“The exceptional performance was partly driven by significant support from global price movements, but also reflected high volumes related to hoarded inventory and artisanal mining,” Erasmus explains.
“We anticipate that favorable price movements on the international market, new projects, and other structural changes to external trade will help to lift annual gold export proceeds well above the pre-reforms historical average.
