EDITORIAL

Govt. has goofed by leaving out mining in development strategy

It is unfortunate that the third phase of the Malawi Growth and Development Strategy (MGDS III), which has been officially launched by State President Arthur Peter Mutharika, has downgraded the significance of mining as a driver for economic development.

The focus is now on the following national development priorities: Agriculture and Climate Change Management, Education and Skills Development, Transport and ICT infrastructure, Energy, Industry and Tourism Development, and Health and Population Management.

We regard all these sectors as important to uplift the economy of Malawi, which in 2017 was ranked by the International Monetary Fund as the sixth poorest country in the world with Gross Domestic Product (GDP) standing at US$1,172 as compared to resource rich Qatar which tops the rich list with a GDP of US$124,927 and conflict plagued Central African Republic, which emerged as the poorest country with GDP pegged at US$681.

But looking at the world’s rich countries list, it is evident that countries that are achieving greater economic value as compared to Malawi are those which are developing their extractive industries.

Here we are talking about copper-rich Zambia whose GDP is at US$3,997, Tanzania (US$3,283), Zimbabwe (2,277), Mozambique (1,266), South Africa (US$13,403) and Botswana (US$18,146).

It is, therefore, a worrisome development that instead of borrowing a leaf from its regional peers which are developing their extractive industries to spur economic development, Malawi has chosen to take a retrogressive path to exclude the minerals sector in MGDS III.

The surprising thing is that the government included the sector in MGDS II and its implementation saw projects such as the World Bank and European Union funded Mining Governance and Growth Support Project (MGGSP) which has gathered significant data on the country’s mineral potential through an Airborne Geophysical Survey.

The ongoing Geological Mapping and Mineral Assessment Project, being implemented with debt relief financing from the French government, is continuing from where MGGSP has left by interpreting this data and coming up with digital data on mineral occurrence in Malawi which is set to attract investors into this important sector.

We, therefore, expected the government to continue to embrace the mining sector as a priority so that donors continue to devote more funding to develop the sector, which is showing more potential with the continued discovery of sizeable quantities of important minerals including gold, gemstones, rare earths, graphite, titanium, bauxite, coal, uranium, and iron ore.

The government has to bear in mind that mining is a primary industry which supports all the economic and social sectors such that even agriculture stands to benefit from mineral sector development. In this case, it would have made sense for the government to concentrate on the mining of agro-minerals such as phosphate found in districts like Phalombe to ease the burden of importing fertilizer.

With the President ever busy laying stones signaling the onset of construction projects, the government technocrats who have developed MGDS III would have reasoned that all these projects require mining of development minerals such as sand, quarry and brick molding.

It is, therefore, absurd to neglect mining of these minerals in coming up with a development plan. The best would be to encourage such mining activities so that they contribute to the government purse in form of taxes besides aiding in development projects by providing the necessary raw materials.

But by ignoring the minerals sector in MGDS III, the government has neglected the large group of small-scale miners who extract the said development minerals and precious minerals including gemstones and gold, who unlike the large scale miners need much assistance from the government to ensure economic survival.

We, therefore, request the government to review MGDS III and consider mining as a priority area. We should not get back to the past when politicians used to say the country has no minerals and people should work hard in subsistence farming when neighbouring countries with similar geological set-up are developing their mineral sectors for socio-economic gains.

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This piece was initially published in Malawi’s Mining & Trade Review Issue Number 60 (April 2018).

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