Analysis of the factors influencing local employment in the mining sector in the Benishangul-Gumuz Regional state of Ethiopia

Abstract

This article aims to analyze the factors that determine local employment in the mining sector and identify ways to improve the annual income of employed households in the Benishangul-Gumuz Regional State (BGR) of Ethiopia. The research design used for this study was cross-sectional. Quantitative data were collected from a sample of 162 households affected by mining operations, using systematic random sampling. Additionally, four focus group discussions (FGD) and eight key informant interviews (KII) were conducted to gather qualitative data. The quantitative data was analyzed using descriptive statistics and the Heckman two-stage model, while the qualitative data was analyzed using narrative analysis. The descriptive results indicate that most of the jobs created by the mining industries were temporary, and the small-scale mining sector employed more workers than the large-scale sector. Furthermore, migrant laborers benefited more from employment opportunities than indigenous households. The first result of the Heckman two-stage model reveals that the educational level of the household head, the size of the farmland, and membership in a farmer's organization have significant negative effects on local employment. On the other hand, the sex of the household head, the size of the nearest mining project, access to information, access to transport, and access to credit have significant positive effects on local employment. The second-stage results of the Heckman two-stage model show that the age of the household head, the dependency ratio, and membership in farmers' organizations have statistically significant negative effects on the annual income of employed households. Conversely, non-farm activities have statistically significant positive effects on the annual income of employed households. The findings of this study have implications for identifying the determinants and factors that need to be addressed to promote local employment. We suggest that both the Ethiopian and BGR regional governments should work towards increasing local employment opportunities for indigenous communities in the mining sector.