The National Bank of Ethiopia (NBE) has revised its gold purchasing rate for small-scale miners in a bid to encourage production and supply.
The decision was made during its board of directors meeting on Wednesday.
Currently, the central bank pays gold from artisanal miners at 35 percent above the international gold price.
The bank will now abandon this flat rate when the newly revised prices become effective as of Saturday, May 6, 2023.
And it has set new premium prices at 35%, 52%, and 55% for the supply of gold weighing upto 150 grams, 1kg, and 5kg, respectively.
The premium will be 60% for miners that supply more than the five-kilogram threshold, the central bank said Thursday.
The prices will also be determined based on the daily international gold market rate.
The move, the central bank says, is aimed at curbing contraband trade and encouraging small-scale miners to sell gold through legal channels.
Authorities hope the latest move will reverse the drop in gold export hit by increasing contraband this year.
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The sector managed to attain less than half the target set for the first half of the current fiscal year, during which 1.9 tons of gold were mined and supplied to the central bank. Artisanal miners contributed only 17% of the total.
Next to Coffee, Gold was the second top forex generator for Ethiopia last year, bringing $560 million in export.