By Olufemi Terry
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.
Click here to read the report .