Mining sector still sidelined—experts – The Times Group Malawi

post was last updated: September 17, 2019

The government has been faulted for lacking commitment to improve the mining sector’s input to the Gross Domestic Product (GDP).

This comes as the sector has registered slow growth in recent past, despite being touted as the country’s next big thing.

Before 2014, mining used to contribute about 10 percent to GDP when the Kayelekera Uranium Mine in Karonga District was operational.

But since the mine was put on care and maintenance in February 2014 due to tumbling prices of uranium on the global market, the sector’s contribution to GDP has dropped to below one percent.

Last year, the mining sector grew by 2.3 percent from 1.6 percent in 2017 and 0.4 percent and 1.1 percent in 2016 and 2015, respectively. The sector is projected to grow by 3.6 percent this year.

In the 2019/20 national budget statement, Finance Minister Joseph Mwanamvekha presented to Parliament last week, government has allocated K40 billion to the energy and mining sectors, up from K21.7 billion in the previous year.

The government also plans to set up the Malawi Mining Authority to regulate activities the industry.

But some commentators say more should be done to facilitate sustainable growth in the sector.

Speaking in an interview Monday, Programme Manager for the Church and Society Programme in the Livingstonia Synod of the Church of Central Africa Presbyterian, Paul Mvula, said they expected to see how a small scale miner would benefit from mining programmes in the financial plan.

“It is our understanding that Malawi should be able to focus on mining with seriousness. Sadly, we have gone through the budget and have not seen any sign of seriousness, with more money going to Electricity Supply Corporation of Malawi and Electricity Generation Company [Egenco], but nothing really to mining,” Mvula said.

The expectation, according to Mvula, was to see the government providing loans to indigenous miners so that they could add value to their mining products.

Natural Resources Justice Network in Malawi Chairperson, Kossam Munthali, bemoaned lack of clear activities in the long-term on the part of the government.

“This confirms that the government is not sure of what it wants to do. They might have done well on the establishment of the Mining Authority but still a lot of things raise eyebrows,” he said.

Natural Resources, Energy and Mining Ministry spokesperson, Sangwani Phiri, said the government was strategically promoting mining by investing in the energy sector.

“…it is not correct to assume that the government is more biased towards the energy sector than mining. The reason is that developing mining starts with developing the energy sector in terms of supporting energy generation to support mining. You will notice that Kayelekera Uranium Mine moth-balled into care and maintenance since 2014 due to, among others, the company’s high energy generation costs arising from running diesel-powered power plants,” he said.

Out of the K40 billion allocated to energy and mining, the energy sector has 75 percent of the money with spelt out programmes at the expense of mining.

In the budget, Mwanamvenkha said the government would support Egenco in financing its power generation programme and supporting energy diversification initiatives through the line ministry.

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