IPNEWS: Expanding financial access for Liberia’s artisanal and small-scale mining sub-sector is feasible through formalization and de-risking measures, according to a recent study published by the African Development Bank and the Liberian government.
According to the report, potential solutions to support the livelihoods of small-scale miners include setting up enabling regulatory and institutional frameworks and providing efficient extension services. The study draws on broad-based stakeholder consultations and a robust review and analysis of Liberia’s financial ecosystems and the artisanal and small-scale mining value chain.
It offers a compelling case for greater financial inclusivity as a key enabler for small-scale miners in Liberia and includes a roadmap to formalize the sub-sector. The report posits ample opportunities for financial institutions to engage with the artisanal mining sub-sector, including offering tailored solutions.
The report includes supply-side and demand-side interventions to drive financial inclusion. These interventions align with three pillars: access to financial services, promoting digital financial services and improving consumer protection and financial capabilities.
Benedict Kanu, the Bank’s Country Manager for Liberia, welcomed the report. “Artisanal and small-scale mining is a vital livelihood source for a sizable and needy population of rural and peri-urban Liberians, as well as millions in Sub-Saharan Africa who often travel around their countries in small groups to identify sites where they believe precious minerals or metals can be found.”
Kanu said the benefits of artisanal and small-scale mining are often outweighed by its costs. He added that the relative absence of adequate legislation and government controls in most countries make the environmental and food chain impacts of poorly regulated small-scale mining arguably worse than those of large-scale mines(link is external).
Fred Kabanda, Manager, Extractives Division at the African Natural Resources Management and Investment Centre (ANRC) of the African Development Bank, said: “Financial inclusion and its related metrics could act as a key enabling element for artisanal and small-scale mining actors to address the challenge of operating capital. It would provide incentives for formalizing their activities within the mainstream economy”.
The report calls on the government to work with development and commercial banks and micro-finance institutions to formulate innovative, context-specific solutions for promoting poverty reduction and development in the country.
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.
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.
SEE SUMMARY OF Financial Inclusion Framework and Implementation Roadmap
Globally, artisanal and small-scale mining (ASM) makes a significant contribution to the world’s mineral supply chains, employs at least 44.75 million people, and indirectly supports over 269 million people across 80 countries. Despite making such a vital economic contribution, the sector’s developmental and poverty reduction benefits have been hindered by its informal nature which has created a range of serious challenges and constraints. In general, the Liberian ASM experience reflects the global picture. Liberia is endowed with significant mineral resources and ASM forms the largest segment of the country’s mining industry.
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, but despite its socioeconomic contributions, significant poverty-alleviating benefits have yet to be realized.
Liberia’s ASM sector has been constrained by a series of factors including poor and dangerous working conditions; inappropriate use of technology; the limited technical capacity of miners; their lack of access to finance and funding; corruption; inadequate policy frameworks; limited government support; insufficient security of tenure; and limited access to resources which could be mined which have been properly mapped or explored. These challenges have limited the potential of ASM in Liberia to a subsistence activity.
