Liberia: New African Development Bank study outlines steps to attract artisanal and small-scale miners to formal sector, boosting economy | African Development Bank

Expanding financial access for the artisanal and small-scale mining subsector in Liberia is achievable through formalization and risk reduction measures, according to a recent study published by the African Development Bank and the Liberian government.

According to the report, potential solutions to support small-scale miners’ livelihoods include establishing regulatory and institutional frameworks and providing efficient extension services. The study is based on broad stakeholder consultations and a thorough assessment and analysis of Liberia’s financial ecosystems and the artisanal and small-scale mining value chain.

It provides a compelling case for greater financial inclusiveness as an important enabler for small-scale miners in Liberia and includes a roadmap to formalize the subsector. The report provides ample opportunities for financial institutions to engage with the artisanal mining subsector, including offering tailored solutions.

The report includes supply and demand side interventions to drive financial inclusion. These interventions are in line with three pillars: access to financial services, promotion of digital financial services and improvement of consumer protection and financial opportunities.

Benedict Kanu, the Bank’s Country Manager Liberia, welcomed the report. “Artisan and small-scale mining is an essential source of livelihood for a sizeable and destitute population of rural and suburban Liberians, as well as millions in Sub-Saharan Africa, who often travel their country in small groups to find sites where they believe precious minerals or metals can be found.”

Kanu said the benefits of artisanal and small-scale mining often outweigh the costs. He added that the relative absence of adequate legislation and government controls in most countries makes the environmental and food chain impacts of poorly regulated small-scale mining arguably worse than those of large-scale mining.

Fred Kabanda, Manager, Extractives Division at the African Natural Resources Management and Investment Center (ANRC) of the African Development Bank, said: “Financial inclusion and its metrics can act as an important element for artisanal and small-scale mining actors to meet the working capital challenge. 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 microfinance institutions to formulate innovative, context-specific solutions for promoting poverty reduction and development in the country.

The goal of increasing 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 is supporting the sub-sector through a pilot project, Improving ASM Efficiency and Sustainability through Climate Smart Actions. The pilot is intended to help formalize small-scale mining through a policy environment and capacity building of regulators and the miners.

The bank remains one of Liberia’s most important development partners, supporting major investments in transportation, energy, agriculture, health and water and sanitation. The Bank’s current portfolio in Liberia includes 14 pending and recently approved operations with cumulative commitments amounting to $376.96 million.

Click here to read the report