Despite an end to the active conflict in the Tigray region, Ethiopia’s political and security crisis is deepening. Much of the country’s insecurity is linked to competition over natural resources, which has fuelled land disputes and intensified cross-border smuggling, driven inter-communal conflict, and aggravated environmental hazards.
The expansion of Ethiopia’s illicit gold sector
Ethiopia has substantial gold reserves, particularly in the areas bordering Sudan. These reserves made up more than 95 per cent of the country’s $428 million in mineral exports between 2023–24. Ethiopia officially exported a high of 12 metric tonnes of gold between 2011–12, a figure that fell to 4.2 tonnes in 2023–24, despite the emergence of new gold projects and the expansion of artisanal, or small-scale, mining.
Gold mining is increasingly informal and outside of federal government control. Several large-scale gold projects have been ‘in the pipeline’ for over a decade without starting official production. Some have been overtaken by illegal exploration, extraction and smuggling operations, often in collusion with various government and non-government actors.
Confidential reports suggest that some foreign investors and Ethiopian geologists possess more detailed mining data than the government. Artisanal mining employs at least 1.5 million people (74 per cent of miners) and accounts for 65 per cent of mining foreign exchange earnings.
Ethiopia’s internal conflicts – regional autonomy fuels illicit trade
Of Ethiopia’s regions, Tigray leads the way in exploration and commercial licensing, with over 90 licensed gold mining companies. Tigray was among the biggest suppliers of gold to the National Bank of Ethiopia before the war, with about 26 quintals (2.6 metric tonnes) of gold annually, valued at around $100 million. Since the Tigray war, much of the region’s gold has instead been smuggled – with estimates that nationally, this amounts to as much as 6 tonnes of gold annually, significantly more than current official exports.
Multiple non-state actors, including leaders of the Tigray Defense Forces (TDF), foreign nationals, and local businesspeople are involved. Control over gold has been one of the reasons impacting the recent internal split within the leadership of the Tigray People’s Liberation Front (TPLF), the dominant party in the region.
Reports suggest that TDF leaders and some members of the TPLF oversee most of the illicit mining, with gold smuggled out of Ethiopia through Sudan, to the UAE. This plunder of gold ultimately harms the Tigrayan public, as the resource should be used to rebuild the region destroyed by a devastating war. Equally worrying, the gold rush in Tigray is becoming increasingly violent. A recent conflict in a Rahwa gold mine in northwestern Tigray resulted in over 20 deaths.
Other conflict-prone regions are also seeing an expansion of the illicit gold sector, with Benishangul and Oromia regions ‘officially’ barely producing a quarter of the amounts projected by the government. A Canadian company agreed to invest $500m over 15 years in exploiting gold reserves around the small town of Kurmuk in Benishangul, along the Sudanese border. But encroachment by illicit miners has prevented access to the site, and the involvement of regional officials and local militants has left the federal government unable to act. There are reports of massive extraction taking place, with gold again being smuggled out via Sudan to the UAE.
Keen to prevent the loss of hundreds of millions of dollars every year, the Ethiopian government is trying to curb illegal mining. Cracking down on the illicit market, incentivizing legal suppliers, and amending restrictive and ambiguous laws are measures the government is taking.
However, contested authority between federal, regional and local administrations has paved the way for opportunistic, nepotistic, and criminal elements to profit, which fuels armed conflict. As such, the federal government’s ability to impose peace and security is uncertain at best.
The transnational networks of gold
These state and non-state elites also cooperate and compete for power in transnational spaces. Sudan is the primary recipient of illicit gold from Ethiopia due to its proximity to Ethiopia’s gold belt. Illicit gold from Benishangul, Gambela, Oromia, Tigray and parts of southern Ethiopia flows into Sudan via a porous border with the help of smugglers and brokers, facilitated by conflict in Ethiopia’s Tigray region and in Sudan.
Other smuggling routes traverse Afar to Eritrea and Somaliland, and the Guji area near the Kenyan border. Regional airports have also become transit points for illicit gold, which is sent to destinations like Uganda and then re-exported to the UAE.
The illicit gold networks in Sudan have flourished in its war economy. Profits generated by the smuggling of gold from and through Ethiopia, Eritrea, Uganda and as far as the DRC, alongside domestic Sudanese production, sustain the war efforts of armed actors, notably the Sudanese Armed Forces and Rapid Support Forces.
But it is the UAE that is the ultimate destination for much of Africa’s smuggled gold, including Ethiopia’s. According to a recent report by Swiss Aid, 2,569 metric tonnes of undeclared gold from Africa, worth a staggering $115 billion, ended up there between 2012 and 2022. The UAE’s questionable import procedures, which do not necessarily require detailed information about the origins of gold, as well as incentives to import ‘scrap’ gold, make it ideal for smugglers.
Long-term solutions
The expansion of illicit gold mining is exacerbating Ethiopia’s complex conflicts. Regional states have reclaimed mining concessions to assert control amid diminishing federal influence. At the same time non-state armed actors are competing for gold revenues to expand their local authority and, in some cases, challenge the authority of the state. The gold sector is becoming increasingly fragmented and militarized, and risks being drawn into multiple local and ethnic fractures as the federal government struggles to impose the rule of law.