The piece “Malawi applies for EITI ‘Candidature’” featured below was initially published in Malawi’s Mining Review Issue Number 28 2015 that is circulating this August 2015.

The full edition is available for download here. This monthly publication is edited by Marcel Chimwala.

Malawi applies for EITI ‘Candidature’

By Chiku Jere

The Malawi Government has finally applied for Extractive Industries Transparency Initiative (EITI) candidature to ensure transparency and accountability in managing mineral revenue.

Chief Economist for the Ministry of Finance, Mr. George Harawa, tells Mining Review in an exclusive interview that the government has lodged the application after satisfying all requirements to join the grouping, which started with a commitment by State President His Excellency Professor Arthur Peter Mutharika during his inaugural State of the Nation Address of June 17th, 2014.

Mutharika, who has been at the forefront marketing Malawi’s Mineral Wealth to investors during his international escapades, has since his inaugural speech been championing the EITI course that will ensure that benefits from mining trickle down to the local masses.

EITI is an international initiative targeted at promoting revenue transparency in the extractive industry as one way of enhancing good management of benefits from natural resources.

Malawi has since nominated Hon. Goodall Gondwe as Acting National EITI Champion as per mandatory requirement for a particular country’s EITI candidature.

The country has in place a multi-stakeholder group comprising Mr. Chrispin Kulemeka who is the Director for Revenue Division in the Ministry of Finance, Mr. Charles Kaphwiyo the Commissioner for Mines, Mr. Bartwell Chingoli of the Reserve Bank of Malawi, Mr. Charles Maseya Deputy Auditor General at the National Audit Office, Mrs. Martha Khonje Country Director for Actionaaid, Mr. Reinford Mwangonde Executive Director for Citizens for Justice, Mr. Success Sikwese Project Officer Extractives Catholic Commission for Justice and Peace, Mr. Kossam Muthali Executive Director Foundation for Community Support Services (FOCUS), Mr. Greg Walker General Manager Paladin Africa, Mr. Neville Huxhum Executive Manager Globe Metals and Mining, Mr. Misheck Munthali Director Bwanje Cement Company and Mr. Burton Kachinjika Country Director Mkango Resources Limited.

Committing to this global transparency initiative implies that Malawi has subscribed to the idea on the need to promote improved data and dialogue in natural resources governance.

After the confirmation of the candidature, Malawi will have 18 months to submit the first EITI report of contextual information on the extractives sector in Malawi and data on revenues, licences, production, exports and contribution to the economy.

The report will have to include companies’ published payments and government receipts and it is used as a tool to improve extractive sector governance by identifying challenges and weaknesses, and defining priorities for natural resource management through reformatory dialogue.

The EITI Standard lays out seven requirements on how to report activity in the oil, gas and mining sectors along the value chain of extracting a resource turning it into public benefit.

By virtual of pledging to adhere to the EITI Standard through the submission of the application, Malawi has now become a ‘candidate’ and it has 2.5 years from the date of admission as a candidate to meet the requirements to attain ‘compliant’ status which guarantees membership.

According to EITI Fact Sheet 2015, so far, 48 countries implement EITI, 31 comply with the requirements, while 17, are just ‘candidates’.

Countries are assessed every three years and can be suspended from the transparency standard at any time the member country fails to fulfil the requirements.

Among the seven requirements of the EITI Standard are effective oversight by the multi-stakeholder group, timely publication of EITI reports, the production of comprehensive EITI reports that include full government disclosure of extractive industry revenues, and disclosure of all material payments.

The country is then evaluated independently, and if deemed to have met the EITI requirements for transparency, becomes ‘compliant’. From then on, countries are assessed every three years and can be suspended from the transparency standard at any time.

Reports indicate that implementation of EITI by other countries has led to a wide range of benefits such as improved tax collection and budgetary planning as well as improved governance systems which enhanced citizens’ trust in government.

It is also said that adherence to EITI Standard levels the playing field as all companies are required to disclose the same information hence operating on same rules.

Further reports say that through the initiative, companies also benefit from improved and more stable investment climate which is ushered by open and effective engagements with the citizens and civil society. On the other hand, citizens benefit from receiving reliable information about their country’s natural resources which enables them to hold the government and companies to account.

This far, the Malawi government has introduced reforms as well as effected some relevant policy changes and projects to do away with investment constraints in keys sectors, the mining sector inclusive.

In May this year, EITI International Secretariat’s Conference Manager, Lyydia Kilpi, visited Malawi as part of the required EITI membership process.

During her stay she fulfilled several engagements, which included conducting a stakeholders’ workshop and participating in the second EITI Multi-Stakeholder Group (MSG) meeting, whose members include government, industry and civil society representatives, independently elected by their respective constituents.

Kilpi also had audiences with the Minister of Finance, Economic Planning and Development, Honourable Goodall Gondwe, as well as the Minister of Natural Resources, Energy and Mining, Honourable Bright Msaka SC.