By Oracle News Daily
Small-scale mining of gold, diamond and other industrial minerals is the likely game changer in the push to unlock the cycle of poverty in African’s oddest republic of 5.5 million people but corruption, poor regulation, lack of finance and flourishing underground operation are hindering gains.
L Iberia’s artisanal mining sector holds potential to contribute to addressing unemployment and reducing poverty, the African Development Bank said in a study on natural resource and financial inclusion published in collaboration with
The sector directly employs over 100,000 people and could perform better with respect to job creation when well managed, the study shows. Bring artisanal and small-scale miners into formal sector will bolster the domestic economy, it said.
Miners are experiencing poor access to finance, as banks and other financial institution are reluctant to extend loans and other financial services to what is perceived to be an unregulated sector.
Financial inclusion can however be achieved through a process of formalization and subsequent de-risking, the report said.
“These challenges have led to the failure to harness the potential of ASM to contribute to improving rural livelihoods,
stimulate entrepreneurship in a socially responsible manner and contribute to integrated national and regional
“The first part of the financial inclusion framework contains a blueprint for providing a ‘golden triangle’ of sectoral
support that could prove to be the basis for sustainable livelihoods and local economic development.
This includes an enabling regulatory and institutional framework, developing and implementing efficient extension services and providing access to finance structured around the three pillars of the Liberian non-bank financial institutions (NBFIs). Specifically, access to financial services, promoting digital financial services and improving consumer protection and financial capabilities.
The artisanal and small-scale mining of gold and diamonds supports the livelihoods of between half a million to 1.5 million people directly and indirectly.
The African Development Bank has been supporting the sub-sector through a pilot project, Enhancing the efficiency and sustainability of ASM through climate-smart actions. The pilot aims to help formalize small-scale mining through policy environment and building capacity of regulators and the miners.
The Bank remains one of Liberia’s key development partners, supporting major investments in transport, energy, agriculture, health, and water and sanitation. The Bank’s current portfolio in Liberia comprises 14 ongoing and recently
approved operations with cumulative commitments amounting to $376.96 million.
The goal of widening financial inclusion for artisanal miners aligns with Liberia’s 2020-2024 National Financial Inclusion Strategy and the 2018-2023 Pro-Poor Agenda for Prosperity and Development.