The piece “Donors caution Malawi against expecting instant mining benefits” featured below was initially published in Malawi’s Mining & Trade Review Issue Number 30 that is circulating this October 2015.
The full edition is available for download here. This monthly publication is edited by Marcel Chimwala.
Donors caution Malawi against expecting instant mining benefits
By Chiku Jere
The World Bank and European Union have cautioned Malawians against expecting instant benefits from mining activities saying such ventures involve long processes hence take time to evolve into profitability.
The two donor organisations sounded the caution during the official launch of the Country-wide High Resolution Airborne Geophysical Data which took place on August 20, 2015 at Bingu International Conference Centre (BICC) in Lilongwe.
The World Bank and EU provided funding to the tune of US$25-million and 5.7-million Euros respectively to the Malawi Government to finance the Mining Governance and Growth Support Project, which included the survey among its components.
World Bank Country Manager for Malawi, Laura Kullenberg, said she is hopeful that the availability of geophysical data from the survey is a tool that will facilitate foreign investment for Malawi as it has done in other countries.
The completion of the geo-data acquisition programme signifies that Malawi, which lacked basic geological information, has moved forward to explore more deeply for mineral data as it has identified more sites to be followed up. Should this bring results, the sector will significantly contribute to the country’s economic development
However, she emphatically advised on the need for the country to manage expectation, as benefits from such investments are not, in any way, short-term coming.
It has to be taken seriously into consideration that mining is a huge undertaking which involves protracted processes and huge capital investment. Hence, there is need to exercise patience as benefits will not come overnight, but over a period of time,
Kullenberg said, adding that it takes about 10 to 15 years to turn an anomaly into a revenue producing structure.
She said the countries that are enjoying mineral benefits today had to endure years of patience and understanding to reach where they are.
Kullenberg also said that finding mineral resources is not the end of it all but utilising them for the benefit of the public through a transparent and accountable system.
Concurring with his counterpart, EU Head of Delegation to Malawi Ambassador Marchel Gerrmann advised Malawians to endure what he termed a long process that is ahead for the country to start reaping the fruits of its mineral resources.
There is need for infrastructure development in the sector and it is very important that proper management system of the resources is put in place so that the people of this country should benefit. And this takes a bit of time,
The diplomat also warned against raised expectation as regards benefits from the sector saying it might not even be this generation, but the next one, that will benefit from the minerals.
Gerrmann called for the need to create accommodative investment atmosphere in order to retain investors observing that the private sector remains very crucial in as far as the development of the mining industry is concerned.
The two organisations’ sentiments come on the heels of public disgruntlement on a few mining deals that Malawi has managed to scratched out especially on issues of community compensation and benefits as well as investors’ social responsibility pledges.
But seasoned Mining and Environmental Management expert, Grain Malunga, commented that such scenarios could be avoided with proper communication and community involvement from the onset of projects.
Such problems emerge when there is an aura of secrecy due to lack of detailed information to the public on mining agreements. This creates room for speculation and misrepresentation that end up fuelling unrealistic expectations to the immediate communities with regard to the benefits expected from the mining activity,
He said people from a particular mining area are supposed to be updated of the planned activity, they have to be aware of whatever change will occur in the area and on their livelihood due to the activity, and they have to be taken on board in the undertakings to avoid creating raised expectation based on hearsay.
Malunga was speaking during national public debate organised by Catholic Commission for Justice and Peace (CCJP) with support from Tilitonse Fund, which, among many other issues, tackled public expectation in the mining sector.
The theme of the debate which was held at Crossroads Hotel in Lilongwe and aired live on Zodiak Radio was: “Is the current Mines and Minerals Draft Bill responding to the burning issues that Malawians in civil society organisations, faith-based organisations and local communities have been raising?”