The National Bank of Ethiopia (NBE) said on Monday that contraband trade is hurting the country’s gold supply and revenue from the sector.
NBE Governor Teklewolde Atnafu said the central bank will soon resume an incentive suspended for gold suppliers to combat contraband traders.
The central bank had been buying gold at prices five percent higher than those at the London metal exchange, leading to an annual loss of some 80 million to 100 million Ethiopian Birr (about 3 million to 3.7 million U.S. dollars).
Cognizant of the sector’s significance for the country, particularly in creating employment opportunities, the bank had been buying with the higher rate.
However, due to the incentive’s “unprofitable” nature, the bank suspended the incentive package in 2011.
The central bank said on Monday that in order to reduce the impact of the contraband trade, it will once again make the incentive package effective.
It has also announced that the minimum amount of gold that the bank buys from gold suppliers will be reduced to 50 grams from the previous 150 grams. Enditem