Factors Influencing Marketing Margin of Artisanal Gold Miners of Menge Woreda

Abstract

There is a paradox coming out of the operations of the mining industries in most developing countries. It was believed that the presence of minerals in a country would automatically lead to growth and improved welfare of the people. This has not happened and lead to the source of unhappiness or harm. Gold is one of the precious metals, and is found in substantial amount in most of the western part of Ethiopia particularly in Benishangul Gumuz region, Menge woreda. The main problem for this research emanates from the fact that the long years Artisanal gold miners effort to gold mining activities detained under long marketing chain, lowest amount of marketing margin for Artisanal gold miners and weak institutional support have contributed to the host of conflict and the mining industry has not improved the livelihood of miners. This study was undertaken with the intention of addressing four main objectives: assessing the existing gold marketing channels, identifying socio-economic factors significantly affecting the marketing margin of artisanal gold miners, analyzing the role of legal and institutional framework for gold marketing, and suggesting possible strategies which influence better performance of Artisanal gold miners in the study area. To this end, two stages random sampling method was employed to select the Woreda, kebeles and the sample size. Both primary and secondary data were collected for the study. Primary data sources were house hold heads of 130 Artisanal miners and 30 traders at different levels with the help of structured interview schedule. Focus group discussion was also conducted by using checklist. Secondary data were taken from different levels of mining and energy offices, Trading and Industry, Custom Agency, Central Statistics agency, National bank and Woreda Agriculture and Rural Development Office, Publication, Reports, Bulletin, and Wave pages. Descriptive statistics and binary Logit model were the tools employed to analyze the data with the help of JMP 5, and SPSS version 16 statistical soft ware. The result of examining the existing market margin indicates that there are eight market chains. Within this chain (20%) of the total marketing margin, which is equivalent to 67.56 birr per gram of gold came into view. The identification of factors positively influence marketing margin of artisanal miners were: credit facilities at (99%) confidence interval. Educational status, cooperation of miners, Agricultural production, marketing information, and saving culture also found positively affect the marketing margin of artisanal miners at 95% confidence interval. In consideration of legal and Institutional support, two mining tax and one newly developed transaction of precious minerals proclamation were declared, but 95% of the artisanal miners were not aware of it. The expected marketing information and technical support of different level of concerned government organization valid at 5.4%, and only 12% of 30 sample traders have license to purchase and sell gold product that production activities performed entirely without any license. Hence, this implies, that there were long marketing channels, wide range of market margin, Weak financial position disorganized marketing activity of miners, weak institutional support, and limited capacity of government to control illegal market environment found to be a Sevier problems of the study area. Therefore; it is recommended to launch direct market chain between miners and National Bank of Ethiopia, encouraging microfinance institution to open branch near by miners ,organizing valid and vibrant marketing cooperative and capacitate institutions to enable to give update market information ,research ,extension service. The study result provide general information for decision makers, planers and other development stakeholders involved directly or indirectly in promoting mining. Besides, the important gold marketing channels were not well identified. Therefore, it is important that the supply potential with the major production constraints are documented in order to design appropriate intervention measures for the study segment in the area which can boost the role of artisanal miner’s income and employment opportunity. Moreover, the study will hopefully serve as a springboard for further and detailed study in the region.