Malawi’s Mining Sector: The Catalyst for Sustainable Economic Growth

Key Business Points

• Diversification of exports: Malawi’s mining sector is expected to reduce the country’s over-reliance on tobacco and improve foreign exchange earnings, with potential exports reaching $30 billion by 2040.
• Growth opportunities: The mining sector, particularly green minerals such as graphite and rutile, is projected to contribute significantly to Malawi’s GDP, with potential annual mineral export revenues reaching $3 billion by 2034.
• Revenue increase: With prudent management, the mining sector has the potential to increase government revenue through taxes, surpassing revenue from agriculture exports and boosting foreign exchange generation.

The Export Development Fund (EDF), a subsidiary of the Reserve Bank of Malawi (RBM), has highlighted the potential of the mining sector to have a positive impact on Malawi’s macroeconomic stability. According to the EDF report, "Mining for Prosperity: Charting a business-friendly path to export diversification," the rise of the mining sector will diversify Malawi’s export basket and improve foreign exchange earnings. The report notes that "overcoming significant hurdles" is crucial to realizing the potential contributions of the mining sector.

The World Bank projections indicate that by 2027, mining could account for about 12 percent of the country’s gross domestic product. In terms of exports, the mining sector could generate a cumulative $30 billion in exports from 2026 to 2040, with annual mineral export revenues reaching about $3 billion by 2034. The bulk of this growth is expected to come from green minerals such as graphite, titanium (rutile), niobium, and rare earths, which are in high demand globally for clean energy and high-tech industries. As the Chichewa business phrase "Kusaka bizinesi" (to grow business) suggests, the mining sector has the potential to drive economic growth and increase foreign exchange generation.

Mining consultant Grain Malunga emphasized the importance of prudent management in realizing the potential of the mining sector, stating that "direct taxes, including royalties, company income tax, and withholding tax," will eventually surpass revenue from agriculture exports. The Mines and Mineral Regulatory Authority has also committed to ensuring that policies are formulated in a timely manner, without "bureaucracy-induced delays". The Reserve Bank of Malawi has revised its 2025 mining sector growth projection upwards to 6.3 percent, citing the resumption of uranium production at Kayelekera Uranium Mine. As the mining sector continues to grow, it is essential for businesses to consider the opportunities and challenges that come with it, and to "titha ndi malamulo" (work with the laws) to ensure sustainable growth and development.

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