Ethiopia to receive US $25M boost for mining sector
Ethiopia is set to receive support from the Development Bank of Ethiopia (DBE) to boost mining sector in the country.
The bank announced an allocation of more than US $25million to over 110 customers engaged in mining activities. Additionally, the bank has recently delivered 15 loader machines, acquired for US $791,216 to mining clients to enhance their mining and construction operations.
In addition to its involvement in the mining sector, the DBE is also engaged in importing various agricultural machinery. These agricultural machines are made available to customers to support the modernization of the agriculture sector, which is considered the backbone of the Ethiopian economy.
Mining in Ethiopia
The DBE has undergone significant improvements in recent years. In 2019/2020, the bank faced financial challenges, with its capital at US $47million and near bankruptcy. However, it has since implemented a series of reform measures that have helped it become profitable. As a result, the bank’s lending capacity has increased, allowing it to provide loans of up to US $144million for a single project.
The DBE operates as a policy bank, and its primary goal is to channel the country’s resources towards productive sectors, with a particular emphasis on agriculture. To encourage investment in these sectors, the bank offers loans with favorable terms, including a repayment period of up to 20 years and an interest rate of 11.5%.
Mining plays a crucial role in Ethiopia’s efforts to diversify its economy beyond agriculture. Although mining currently contributes only 1% of the country’s GDP, it holds significant potential for growth and development. Gold is one of the most important commodities for Ethiopia’s mining sector. The country has substantial gold deposits, and mining activities have been on the rise. Gold mining contributes to both domestic consumption and export revenue. Ethiopia has deposits of coal, opal, and other minerals. However, their exploitation may not be as significant as gold and gemstones due to various factors such as infrastructure, market demand, and investment.
