Ministry Ponders Reforms to Overcome Downturn

The reform includes new policies at the Ministry of Mines, Petroleum & Natural Gas

The Ministry of Mines, Petroleum & Natural Gas is set to undergo a major reform by restructuring itself and introducing new policies in a bid to alleviate challenges in the industry and improve the efficiencies of its service delivery.

The reform will be undertaken in five major areas under the direction of six committees to be formed from the Office of state ministers, the Ethiopian Geological Survey and the Ministry itself.

Designing policy frameworks for both the mining and natural gas industries, reorganizing the human resources of the institution and enhancing the information and communication technologies at the Ministry are the primary areas to be considered in reforms.

The project aims to ease problems facing the industry, according to Michael Mengesha, public relations and communications director at the Ministry.

“The sector has been dealing with problems of illegal trading, information gap and poor technological advancements,” Michael told Fortune.

The revenue the country is generating from the sector has been dwindling in the past couple of years. In the 2016/17 budget year, the Ministry planned to earn 780.87 million dollars but achieved only 27.4pc of the target. This figure represents a 31pc decline compared to the 2015/2016 budget year. In the past fiscal year, the country generated 133.5 million dollars from the mining industry, which is 37.7pc less when compared to figures from two years prior.

Illegal trading, political instability and a lack of new entrants into the sector are the major reasons attributed for the revenue decline, according to the Ministry.

The restructuring will introduce offices of Mines, Petroleum & Natural Gas at regional levels. Unlike many federal institutions, the Ministry does not have its own structure at a regional level.  Instead, it has been operating by merging with water, irrigation and electricity offices.

Information technology, procurement procedures and database management systems at the Ministry will also be overhauled. Once the study is completed, the revamp will enable the Ministry to efficiently monitor, evaluate and control the production and export of natural resources by moving away from manual management systems.

“The technological renovation is believed to create the capacity to gain reliable data,” reads the reform plan.

The business community largely celebrates the initiatives by the Ministry.

“I think the reform is timely,” says Mazengia Demma, an investor in gemstone mining. “We were not getting efficient services at regional offices due to overlapping assignments and overloads at the regional bureaus.”

Balemual Atinafu (PhD), a university lecturer at Addis Abeba University’s School of Geology for the past two decades, complimented the reforms at the Ministry, but recommends the involvement of experts and stakeholders in the process.

“To make the process effective, the government needs to work with independent experts,” said Balemual. “The restructuring should also consider how the Ministry would work in synergy with the stakeholder institutions.”

Before getting its current structure two years ago, the Ministry had a series of organisational restructurings since its establishment in 1977, operating  as the Ministry of Mines, Energy & Water Resources. After the water sector separated itself in 1982, the energy sector was divided in two and restructured under the Ministry of Agriculture & Rural Development and the Ministry of Infrastructure.  The mining sector was organised alone as a Ministry of Mines in 2002. In 2005, it was renamed the Ministry of Mines & Energy and then was restructured again in 2010 as the Ministry of Mines.

The Ministry currently is responsible for the geosciences data of the country, promoting the mineral, petroleum and natural gas potential of the country, negotiating and issuing licenses to private investors and controlling mining practices according to the concession agreements.


Published on Sep 01,2018 [ Vol 19 ,No 957]



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