The Eye on Malawi’s EITI column featured below was initially published in Malawi’s Mining Review Issue Number 26 2015 that is circulating this July 2015.
The full edition is available for download here. This monthly publication is edited by Marcel Chimwala.
By Rachel Etter
In May, Malawi received a visit from the Extractive Industries Transparency Initiative (EITI) International Secretariat’s Lyydia Kilpi. Kilpi, Conference Manager at the EITI International Secretariat, conducted a stakeholders’ workshop, participated in the second Multi-Stakeholder Group (MSG) meeting, and met with both the Minister of Finance, Economic Planning and Development, Hon. Goodall Gondwe, and the Minister of Natural Resources, Energy and Mining, Hon. Bright Msaka.
Malawi has committed to this global transparency initiative to promote improved data and dialogue in natural resources governance. The president, Hon. Prof. Arthur Peter Mutharika, emphasised his ongoing support for ensuring natural resource wealth is used for sustainable economic development through the EITI as he opened the sitting of parliament this May,
let me also report that in view of the commitment by Government to enhance transparency in the mining sector, Government will join the Extractive Industries Transparency Initiative (EITI) to promote revenue transparency. In this regard, Government will formally be applying for candidature under the EITI once all preparatory processes are concluded.
The first public declaration to join the EITI was made just over a year ago, in June 2014, during Mutharika’s inaugural State of the Nation address.
Kilpi congratulated the MSG representatives from government, industry and civil society on the progress Malawi is making to apply for EITI candidacy. At present, the MSG is finalising the application package and expects to have submitted this by the time the July edition of the Mining Review is circulated. The EITI International Secretariat is providing support in reviewing this package which includes the costed workplan for implementation of the EITI as well as for setting up a National EITI Secretariat in the Revenue Policy Division within the Ministry of Finance, Economic Planning and Development.
Once the application is submitted and candidature awarded, Malawi will have 18 months to submit the first EITI report. The implementation of this is governed by the MSG – the coalition of elected government, industry and civil society representatives. This report will include contextual information on the extractives sector in Malawi and data on revenues, licences, production, exports and contribution to the economy; it demands that companies publish their payment and government publishes receipt. Kilpi emphasised during the stakeholder meeting that the report can then be used as a tool to improve extractive sector governance, identify challenges and weaknesses and define priorities for natural resource management, inform dialogue and reforms, and consolidate transparency in government and company operations.
In Ghana, data from the EITI reports has been used to reform revenue sharing mechanisms with regions and district assemblies. According to the EITI 2015 Progress Report Making Transparency Matter, 10% of royalties are supposed to be transferred from the central government to local government authorities, but it was found that regional offices usually did not make the transfer and that transferred money was used for recurrent expenditures rather than development projects. Designated bank accounts have now been set up to track and monitor transfers, which is important for ensuring maximum community benefits and companies’ social licence to operate. Malawi’s MSG will have an opportunity to learn first-hand how EITI is best implemented for improving natural resource governance. The MSG along with other governmental stakeholders will visit Zambia’s National EITI Secretariat at the end of June. Watch this space for information on the trip.
Read the EITI 2015 Progress Report here - http://progrep.eiti.org/.