Factors that Affect the Level of Gold Resource Mining in Ethiopia
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Date
2021-07
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A.A.U
Abstract
Decade ago, gold constituted close to one-fifth of the total export earning of Ethiopia. Gold was the second largest foreign currency generator next to coffee. But the country has not been able to sustain this momentum. Export income dwindling continuously. The major objective of this paper is to investigate the magnitude of impact of selected economic variables on gold resource mining in Ethiopia using descriptive analysis and OLS time series econometric model for the period 1987-2017 collected from National Bank of Ethiopia (NBE). The study was motivated by the fact that the country is in deep need of a foreign currency earning and the means to earn could have been boosted given the current historical high prices of world gold due to uncertainties created as a result of recent pandemic. Empirical result reveal that population and world price of gold have positive significant effect on level of annual gold extraction in the short run, while, inflation, population and world price of gold have positive significant effect on level of annual gold extraction in the long run. However, the study found out that GDP, Interest rate, Economic growth had statistically insignificant impact on gold resource extraction. This study also included important policy recommendation. The finding of this study implies that the need to develop a scheme or policy that controls gold mining in line with world gold price, as it is the main determining factor for movement in gold extraction level and also since it dictates the remaining gold export determinant variables.
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Keywords
Gold Resource, Mining In Ethiopia