Ethiopia resumes local gold trade

Ethiopia's central bank has resumed trading in local gold as a 28-year-old, communist-era ban on such sales has come to an end.

    Ethiopia produces about four tonnes of gold a year

    Under new rules, the National Bank of Ethiopia (NBE) will

    purchase gold from licensed local traders and producers at the world

    market rate and sell it to retailers in the impoverished Horn of

    Africa nation, officials said on Friday.

    Ethiopia produces about four tonnes of gold a year, about one

    tonne of which the government estimates has been lost annually to

    black marketeers in neighbouring countries, India and the Middle

    East, since trade was banned in 1977 by the Soviet-backed government of

    Mengistu Haile Mariam.

    Mengistu took power in 1974, overthrowing emperor Haile

    Selassie, and imposing strict communist economic controls, including

    a centrally planned economy. He was toppled in 1991, but the trade

    ban remained.

    Black market

    Gold dealers in Addis Ababa, who said the ban and resulting

    black market trade had destroyed their businesses, breathed a sigh

    of relief as the sales resumed.

    "The black market took over and local miners, searching for

    better prices, started moving across the border"

    Mekonnen Assefa,
    jewelery shop owner

    "We used to buy gold from the NBE," said Mekonnen Assefa, a

    jewellery shop owner. "Once the communists came to power, we were

    denied that right.

    "The black market took over and local miners, searching for

    better prices, started moving across the border," he said.

    Another dealer, Muhammad Aman, echoed that complaint.

    "Traditional miners preferred to go across the border or engage

    in illicit trade inside Ethiopia that was hurting them, us and the

    country at-large," he said.

    Tonnes of gold being smuggled out of the country have been

    intercepted at Addis Ababa's Bole Airport and border points

    in recent years, according to customs officials.

    SOURCE: AFP


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