A new performance report shows that Ethiopia’s gold, which has surpassed coffee as the top exported item, keeps receiving a higher offer than the average price in the international market, a development that comes as a surprise for the mining industry.

Ethiopia exported half a billion dollars worth of gold in the last 10 months for at least 74.2 dollars a gram, exhibiting a 25pc increase from last year, according to the Ministry of Mines & Petroleum. This is exactly opposite to what happened in the international market where the price of gold sat at around 59 dollars at the end of last week, marking a 10pc drop since August 2020, according to goldprice.org, a website dedicated to providing market information about the precious commodity.

Ethiopian authorities attribute the increase to the adjustment made in the central bank’s purchasing price of gold, which has witnessed a 30pc upsurge since last year.

“We've started to offer a better price, even higher than what artisanal miners get in the informal market. This has weakened the contraband market and helped us beat our target,” said Takele Uma, minister of Mines & Petroleum.

About 6,785Kg of gold was exported in the first 10 months of the current fiscal year, helping the Ministry surpass its initial target by 14pc. This is almost twice the volume of the same item shipped in the preceding financial year.

Prior to taking the top spot, annual exports of gold declined for almost five years, even reaching 28 million dollars two years ago. It has since skyrocketed by more than 18 fold, a rare development in the global gold market.

"We've been incentivising miners by regularly adjusting the purchasing price of gold. Additionally, we've been offering a price that is 29pc higher than that of the international market, which has paralysed the parallel market for gold," said Fikadu Digafe, vice governor and chief economist of the central bank. "The higher the volume, the better return the miners would get."

Although industry insiders agree that the rise in purchasing rate has increased the volume of gold collected by the NBE, the surge in export prices at a higher rate than the international price is dubious.