Malawi not utilizing natural resources to create wealth—study
Findings from a recent analysis has revealed that despite being endowed with substantial minerals, gemstones, and waterbodies, Malawi has failed to take advantage of her abundant natural resources to create wealth for her citizens.
State-funded development think tank, the National Planning Commission (NPC) conducted the analysis through its Malawi Priorities Project, which is a research- based collaborative project implemented with technical assistance from the Copenhagen Consensus Centre (CCC) and the African Institute for Development Policy (AFIDEP).
The aim of the project is to provide a systematic process of prioritizing the most effective policy solutions to maximize social, environmental and economic benefits on every kwacha invested.
Under the project, NPC assessed the cost and benefit analysis of national resources management interventions in Malawi’s fisheries and mining.
The analysis highlights two large-scale projects that could increase the value generated by mining and fisheries, namely artisanal and small-scale mining (ASM) Landing Centre and the Chipoka Port Fisheries Project.
NPC Malawi Priorities Project Coordinator Salim Ahmed Mapila presented the findings on Monday afternoon during a panel discussion the Commission has convened at its Head Office in Lilongwe.
Mapila said while the country is endowed with substantial mineral and water resources, informality, lack of sophisticated practices and value-addition, and limited linkages to trade markets limit how much these valuable sectors can contribute to this growth aspiration.
He observed that both sectors face similar barriers to generate more wealth for the country.
“ASM landing centres have substantial benefits, primarily by boosting gemstone and gold ASM revenues by 35 percent equivalent to MWK 10.17 billion per year by 2028. This benefit arises from a combination of improved production efficiency, expanding into new mineral reserves and increased value addition to extracted resources.
“This intervention could also generate benefits worth MWK 625 million in terms of avoided injury, improved sanitation at mine sites and avoided child labour, though the research team was not able to quantify this benefit precisely (due to lack of data),” he said.
The discussion featured Chairperson of the Natural Resource and Climate Change Services Committee at the Malawi Parliament, Welana Chilenga, Principal Secretary (PS) in the Ministry of Forestry and Natural Resources, Dr. Yanira Mtupanyama, PS for the Ministry of Mining, Dr. Joseph Mkandawire, and Dr. Tiwonge Mzumara-Gawa, who is a lecturer in Biological Sciences at Malawi University of Science and Technology as panellists.
In his contribution, Chilenga attributed the problem to inadequate capacity and human capital to implement the Mines and the Minerals Act (2019).
He cited failure by the Ministry of Mining to recruit and deploy District Ministry Officers in all the districts.
“It’s not the equipment that is missing in the mining sector. Ownership is the problem that small-scale miners are grappling with,” said Chilenga.
On the fisheries sector, Chilenga accused the ministry of failing to contain uncontrolled fishing on Lake Malawi.
“Because of uncontrolled fishing in Lake Malawi, we have lost everything now. Malawi doesn’t have fish as of now. So, we should be talking about how we can bring back these resources. The Ministry of Mining is failing to implement the new Mining and Minerals Act. The Act has some penalties, which the ministry can use. The law is there, but they are failing to implement it. The ministry lacks the capacity to control illegal mining and fishing,” he said.
Mtupanyama admitted that the ministry does not have the capacity to implement the statutes.
She also lamented inadequate funding allocations the two sectors get from the government.
NPC Director General Dr. Thomas Chataghalala Munthali said it is vital that mine sites are properly managed during the mine’s useful life, and the land rehabilitated once mining activities cease to ensure minimal environmental impact.
Munthali cautioned that miners will only formalize if the benefits of formalization outweigh the costs.
“The landing centres need to provide true value to miners – in the form of better practices and equipment, higher safety practices and more income – for the intervention to be successful,” he said.
“Overall, the researchers find that the investment would return 3.6 kwacha for every kwacha invested. The landing centres could be a first step towards generating more wealth from minerals and gemstones in Malawi, laying the foundation for a more modern, vibrant and environmentally sustainable mining sector,” added Munthali.
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