Last month, Arthur Peter Mutharika of the Democratic Progressive Party (DPP) was elected as president of Malawi in the country’s first tripartite elections. Today, Mutharika opened the 45th Session of Parliament and Provisional Budget Meeting with the speech, “Transforming Our Country into a Prosperous Nation with a Shared Vision“.
In the opening address, Mutharika focused on the vision set out in the DPP manifesto. He thus reiterated the decision to establish an independent contract negotiating unit in extractive resources and to subscribe to the Extractive Industries Transparency Initiative.
However, Mutharika did not touch on the ongoing dispute between Tanzania and Malawi over Lake Malawi and its oil resources. Tanzanians and Malawians wonder if he will change the country’s approach to this dispute.
Mr. Speaker, Sir, Malawi is richly endowed with high value mineral resources which constitute an important source of wealth for development and foreign exchange for Malawi. The contribution of this sector to the country’s GDP has risen from 3 per cent in 2009 to 10 per cent currently; but has the potential to rise to 20 per cent by 2016 due to Malawi’s unique mineral potential. Government will, therefore, prioritize the effective exploration of these resources.
Mr. Speaker, Sir, Government is committed to the promotion of the mining sector in the country. In this regard, we will endeavour to provide an enabling environment for attracting investments into the sector through the development of new policy, legal and institutional frameworks that protect the long term interests of the country.
Mr. Speaker, Sir, currently, there are a number of foreign companies that are actively engaged in the exploration and evaluation of various minerals in different parts of the country, including rare earth metals, uranium, gold and titanium bearing heavy mineral sands.
Mr. Speaker, Sir, I wish to inform this august House that Government, with support from the World Bank and the European Union started carrying out a country-wide airborne geophysical survey to identify areas with mineral potential and provide readily available information to prospective investors in the sector.
Mr. Speaker, Sir, Government will, in the coming financial year, commence a Geological Mapping exercise of the whole country, with support from the French Government. This will lead to the production of new geological, mineral occurrence, geochemical, metallogenic and seism-tectonic maps for our country.
Mr. Speaker, Sir, Government will also ensure that in future, mining contracts are properly negotiated to maximise benefits for the country. In this regard, Government will establish an independent contract negotiating unit in extractive resources. Further, we will subscribe to the Extractive Industries Transparency Initiative (EITI).
Mutharika briefly linked efforts in mining to his commitment to continue to implement the National Export Strategy (2013-2018) (annexes including Vol. 3 Support Plan for Mining) in order to develop Malawi’s productive base to allow for both export competitiveness and economic empowerment,
establish a “one-stop” investment centre to promote and encourage increased investment in the productive sectors especially in agriculture, mining, manufacturing and tourism; and
Under the section on Education and Human Development, Mutharika highlighted the training of students in fieleds related to the extractive industries,
Out of the 10,000 students, 6,000 students will pursue degree programmes in mining, geology, mineral processing, metallurgy, electronic engineering, telecommunications, construction technology, bio-medics, education, tourism, just to mention a few; while 4,000 rural youths will pursue various TEVET programmes.
Mutharika also underscored the importance of in-country research on harnessing Malawi’s natural resources
Mr. Speaker, Sir, the DDP-led Government is aware that there has not been a deliberate policy for developing science and technology for macroeconomic growth in our country. We will therefore give very high priority to locally-based research programmes and adaptation and utilization of science and technology specifically designed to convert our agricultural primary commodities, minerals and other natural resources into new wealth.
Mutharika is yet to announce his full cabinet although he named Goodall Gondwe as Minister of Finance and Economic Planning and Development earlier this month on 6 June. The number of ministerial portfolios, including deputy ministers, will be reduced to 20.
How feasible is the 2016 target of a 20% contribution to GDP from mining sector. Kayekelera is currently on shut down that will surely reduce the current 10% contribution. Possible to increase contribution from artisanal mining. Other larger mining opportunities will take time (more than 2 years) to start producing serious revenues I suspect. Anyone know which if any are likely to come on stream in the next 12-24 months?
Unless production restarts at Kayelekera, it is unlikely that revenue from the mining sector will meet GDP contribution targets. It is unclear if production will restart in the next 12 to 24 months. According to recent announcements from Paladin, the price for uranium oxide needs to rise and the mine must be connected to the national grid.
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