Political will needed to develop mining sector
It is a welcome development that State President Arthur Peter Mutharika recognized mining as a sector with huge potential to spearhead the country’s economic growth and development in his State of the Nation Address at the opening of the 47th session of parliament and 2018/19 budget meeting.
Mutharika said Government has been implementing a number of initiatives aimed at increasing investments in the sector.
He said some of the initiatives include: capacity building in mining contract negotiation and in development of modern mining agreements to ensure that the country enters into mining agreements that are balanced, equitable, fair and beneficial to the people.
The President also said the country has adopted a regionally competitive Mining Fiscal Regime, which will ensure that investors have confidence in the sector.
He said his government is reviewing the Mines and Minerals Act of 1981 and the Petroleum Act of 1983 to improve the legal environment of the mining industry to enhance development of the sector and increase its benefits to the people promising that the Bills will be tabled in the current session of Parliament.
Mutharika explained that increased investment in mining will result in job creation and more revenue for social and economic growth.
We commend the President for recognizing the potential for the mining sector after he neglected the sector in the third phase of the Malawi Growth and Development Strategy (MGDS III).
We feel political will is all what is needed for Malawi to develop the mining sector to substantially contribute to socio-economic development.
In Malawi’s 30-years of autocratic rule, the leaders used to say that the country has no minerals and its people should only work hard in agriculture. The result was that small-scale agriculture emerged as a key driver of the economy.
Likewise, we feel if the government in this era shows political will to develop mining, many investments will blossom in the sector which will transform mining into a key economic driver.
It is, therefore, unfortunate that despite Mutharika’s encouraging words, his government seems to be sleeping on the job in terms of facilitating mining developments.
For instance, it has taken a number of years for the government to talk of bringing the new Mines and Minerals Bill to parliament.
Similarly, the talk of repealing the 1983 Petroleum Act started way back but there has not been tangible progress on the issue.
The process of developing a model petroleum sharing agreement which was 80% complete in 2013 when the government signed petroleum sharing agreements with multinational oil firms is also at a standstill.
We believe that with political will all these challenges that are inhibiting the growth of the minerals sector can be addressed and we can see the sector thriving with projects such as Kanyika Niobium, Songwe Hill Rare Earth and Malingunde Graphite on stream as history has shown that with political backing ambitious projects have been implemented in the country.
An example is the Kayelekera Uranium Mine which had political backing from the late President Bingu Wa Mutharika who presided over its official launch.
This piece was initially published in Malawi’s Mining & Trade Review Issue Number 62 (June 2018).