Ethiopia

EITI Status Suspended for missing deadline
EITI Member Since 2014
Website EITI Ethiopia

Overview

The country is a leading producer of gold and limestone, but also produces smaller quantities of tantalum, salt and pumice. Ethiopia EITI aims at helping the government reform the mining sector to ensure a good return on Ethiopia’s significant untapped mineral resources.

Extractive Industries contribution

  • 14 %
    to exports
  • 1.2 %
    to GDP
  • 2.1 %
    to government revenue
  • 10.5
    thousand jobs (reporting companies only)

Beneficial ownership disclosure

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.

Production

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.

Natural resources 

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.

CommodityReservesUnitSignificance
Gold>200metric tonsAround Adola, Myale, Metekel, Tulu kape, Dul, Odagodere, Benshangul, Akobo,Tigray
Coal>360million metric tonsAround Moye, Delbi, Yayu, Chilga, Gojeb, Mush, Sar wiha kunzila, Wuchale, Haik, Dese, Mersa, Arjo, Mendi, Kindo halal, Morka, Jeren, Lalosapo.
Tantalum19435metric tonsAround Adola/Keneticha
Platinum12.5metric tonsAround Yubdo, Oromia.
Iron68.4million metric tonsAround Bikilal, Melka arba and others.
Nickel17million metric tonsAround Adola.
Manganese207563metric tonsAround Afar/ Inkafala.
Limestone>900million metric tonsAround Mekele, Abay, Butajira, Ogaden, Denakil, Diredawa, Harar.
Gypsum57.4million metric tonsAround Tigray, Oromia, Amhara.
Clay21.6million metric tonsAround Mossobo, Diredawa, Melka jebdu, Debrebirhan, Burayu.
Potash1.3billion metric tonsAround Afar.
Phosphate181million metric tonsAround Bikilal, Melka arba.
Marble100million metric tonsAround Daletti, Mora, Baruda, Bullen, Hulakuni, Tigray.
Granite70million metric tons
Silica sand3.4million metric tons
Feldspar500thousand metric tons
Quartz400thousand metric tons
Dolomite2million metric tons
Kaolin>20million metric tons
Datomite>120million metric tons
Bentonite172million metric tons
Soda ash460million metric tons
Salt4.3billion metric tons
Sulfur6million metric tons
Graphite460thousand metric tons
Kyanite>10million metric tons
Talc118,175metric tons

Revenue collection

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%).

Revenue allocation

State governments collect and manage their shares of royalties, excise tax, land rentals, license fees and ‘Pay As You Earn” personal income tax in addition to their budget allocations from the Ministry of Finance.

Social and economic contribution

Although Ethiopia has a history of mining, the sector is still small in terms of contribution to the sector, although mining contributes to 14% of total export values.

According to the EITI 2013-14 Report, there are no figures available on how many people are employed by the mining sector, though figures submitted by the companies suggest that at least 10,550 (or 2% of the total employed population) formally work in the sector. The scope of people dependent on the mining sector is however much larger if one also considers artisanal and small-scale mining. Between 300,000 and 350,000 people are engaged in artisanal and small-scale gold mining, while five to seven million people are believed to depend on mining for their livelihood.

Innovations

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.

Implementation

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.

Governance

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.

Timeline

Validation

Ethiopia's Validation against the Standard will commence on 1 April 2018. The country was admitted as EITI candidate in 2014.