This EITI Report covers Ethiopia's extractive sector in 2013-2014. It was published in February 2016.
The three main taxes and fees imposed on companies operating in the mining sector include income tax schedule C (mining), customs duties and signature bonuses. The Ethiopian Revenues and Customs Authority (ERCA) is the main body responsible for collecting and managing taxes paid to the central government. The Ministry of Mines levies sector-specific fees while state governments collect their shares of royalties, excise tax and various other fees directly. No petroleum or mining contract has been disclosed.
Oil and gas licenses are awarded on the basis of competitive tender, while mining licenses are awarded on a ‘first come first served’ basis.
Objectives of beneficial ownership transparency in Ethiopia
- To foster transparency and accountability in the extractive sector;
- To deter corruption, prevent collusion between companies and Government;
- To reduce tax evasion by operating companies; and
- To promote the economic benefit gained from the nation’s natural resources.
Progress on implementing beneficial ownership disclosure
For their first report (2014), Ethiopia EITI requested beneficial ownership data for companies selected in the scope (unless publicly listed or wholly owned subsidiaries). Of the 35 reporting companies, 26 provided details on legal ownership. Due to the significance of the small-scale mining sector in Ethiopia, coverage of the companies with exploration licenses and small scale mining license holders will be one of the main challenges. A 2017 scoping study suggests a high level of enthusiasm among Ethiopian stakeholders on beneficial ownership. The main challenge will be to combine a significant awareness and training programme with work to build new systems and processes to collect and share the beneficial ownership information.
Ethiopia EITI plans to organize, among other things, a workshop for relevant Government and non-Government entities on BO disclosure. Read Ethiopia's beneficial ownership roadmap below for more information.
Ethiopia is a leading producer of mineral commodities such as gold, which accounts for over 80% of output, but also produces limestone, salt, pumice and tantalum. There is also significant informal production, with around 350,000 artisanal gold miners estimated to support a population of up to five to seven million. Ongoing exploration is taking place for oil and gas, although no commercially viable discoveries have yet been found.
Ethiopia has rich deposits of coal, tantalum, iron, nickel, manganese, potash and phosphates. Gold and tantalum reserves are found in the South, West and North of the country. The oil and gas sector is still at the exploration phase. While largely untapped, resources are under development to help diversify Ethiopia’s economy away from agriculture.
|Gold||>200||metric tons||Around Adola, Myale, Metekel, Tulu kape, Dul, Odagodere, Benshangul, Akobo,Tigray|
|Coal||>360||million metric tons||Around Moye, Delbi, Yayu, Chilga, Gojeb, Mush, Sar wiha kunzila, Wuchale, Haik, Dese, Mersa, Arjo, Mendi, Kindo halal, Morka, Jeren, Lalosapo.|
|Tantalum||19435||metric tons||Around Adola/Keneticha|
|Platinum||12.5||metric tons||Around Yubdo, Oromia.|
|Iron||68.4||million metric tons||Around Bikilal, Melka arba and others.|
|Nickel||17||million metric tons||Around Adola.|
|Manganese||207563||metric tons||Around Afar/ Inkafala.|
|Limestone||>900||million metric tons||Around Mekele, Abay, Butajira, Ogaden, Denakil, Diredawa, Harar.|
|Gypsum||57.4||million metric tons||Around Tigray, Oromia, Amhara.|
|Clay||21.6||million metric tons||Around Mossobo, Diredawa, Melka jebdu, Debrebirhan, Burayu.|
|Potash||1.3||billion metric tons||Around Afar.|
|Phosphate||181||million metric tons||Around Bikilal, Melka arba.|
|Marble||100||million metric tons||Around Daletti, Mora, Baruda, Bullen, Hulakuni, Tigray.|
|Granite||70||million metric tons|
|Silica sand||3.4||million metric tons|
|Feldspar||500||thousand metric tons|
|Quartz||400||thousand metric tons|
|Dolomite||2||million metric tons|
|Kaolin||>20||million metric tons|
|Datomite||>120||million metric tons|
|Bentonite||172||million metric tons|
|Soda ash||460||million metric tons|
|Salt||4.3||billion metric tons|
|Sulfur||6||million metric tons|
|Graphite||460||thousand metric tons|
|Kyanite||>10||million metric tons|
The latest EITI disclosures (2014) show that Ethiopia received USD 148 million from extractive industry taxation. Two fifths of these revenues came from gold production and another two fifths from cement manufacturing. Hydrocarbons accounted for only around 9% of total revenues. Revenues were mainly collected through income tax schedule C (mining) (33%), customs duties (7%) and signature bonuses (7%).
The EITI encourages multi-stakeholder groups to explore innovative approaches to make the EITI more relevant and useful.
EITI is considering ways of including artisanal and small-scale mining in EITI reporting given its significance to the national economy. The 2013/14 EITI Report provides an overview of artisanal and small-scale mining including the types of licenses and estimated production figures.
The 2013/14 EITI Report includes important recommendations for reform, ranging from data quality assurance to the license register.
- The 2013/14 EITI Report published details of oil, gas and mining license-holders for the first time.
The objectives of Ethiopia EITI includes ensuring revenue transparency, raising awareness about license allocation procedures, and promoting corporate social responsibility in the mining sector. Ethiopia EITI is also working towards covering the small-scale mining sector in its reporting. The 2016 work plan is currently being updated, including follow up on recommendations from the first (2013/14) EITI Report. EITI Legislation has been drafted, reviewed by the Ministry of Justice and is due for adoption in 2016.
The government, through the Minister of Mines, announced its intention to apply for EITI Candidature in a televised public statement in February 2009. A Memorandum of Understanding was signed between the three stakeholder groups on 29 July 2009. The multi-stakeholder group, called the Ethiopian National Steering Committee (NSC), is composed of five representatives from each stakeholder group. A draft EITI law is being reviewed by the Ministry of Justice and is expected to be adopted in 2016. The EITI Champion is HE Motumma Mekasa, Minister of Mines, Petroleum and Natural Gas.
The 2016 EITI Standard requirement 2.5 makes it mandatory after 1 January 2020 for all implementing countries to request beneficial ownership information and for companies to disclose this information. EITI implementing countries were required to produce a roadmap on beneficial ownership disclosure by 1 January 2017.
Here is a scoping study reviewing the legal and institutional framework for beneficial ownership in Ethiopia, as well as a review of the EEITI 2016 beneficial ownership roadmap published in December 2016.
This is the Ethiopia EITI 2015 Annual Progress Report (in accordance with Requirements 7.4 and 8.4).
This is the Ethiopia EITI 2014-2015 work plan (in accordance with Requirement 1.5).
A report by Ethiopia EITI on the artisanal and small-scale mining sector and its contribution to the economy.
The study suggests the following next steps for including of ASM in the scope of EITI reporting which can be relevant for other implementing countries:
Establishing regular reporting mechanisms for ASM data as well as disclosure and dissemination of information to help inform policies and activities in the sector.Increasing awareness of ASM as a formal and significant source of income for the government,
Ines Schjolberg Marques
Ines Schjolberg Marques is part of the Anglophone and Lusophone Africa team and supports wider policy work at the EITI International Secretariat. She holds an MSc in Development Studies from London School of Economics,
EITI responsibilities: Africa and Middle East. Oversight for finance, human resources, communications, and the Global conferences.
Eddie Rich has been Deputy Head of the EITI since the International Secretariat was established in 2007.