‘Low mining sector funding worrisome’
Experts have said that the 2023-24 national budget statement does not instill hope on the development and growth of the mining sector, which has for long been touted as the next big thing.
When presenting the budget statement to Parliament on Thursday, Finance Minister Sosten Gwengwe only reaffirmed the government’s commitment to promote the sector but could not outline the specific allocation.
Meanwhile, Gwengwe has said the government has issued 51 large-scale Mine Exploration Licences, nine medium-scale mining Licences, 351 small-scale mining licences, and 423 Reserved Minerals Licences.
He added that gold purchases have reached a total volume of 186.96 kilogrammes at a total purchase cost of K9.4 billion, as of November 30 last year.
“Government will, therefore, continue to promote this sector through negotiations with potential investors in the sector in order to realise its full potential,” reads the budget statement which Gwengwe presented to the august House.
Experts say low public funding and failure to swiftly negotiate deals with potential foreign direct investors (FDIs) continue to cripple take-off chances for most mining and minerals exploration activities in the industry.
Malawi’s mining sector accounts for only one percent of gross domestic product but the government says plans are underway to scale-up the sector’s contribution to between 10 and 15 percent by 2030.
Natural Resources Justice Network Chairperson Cossam Munthali said the commitment by the finance minister on mining sector development remains an echo of previous pronouncements which, however, were frustrated by low funding.
He implored Parliament to radically scrutinise the budget and push enough resources for mining sector development.
“There are a lot of proposals that we gave to the minister which we have not seen in the budget and this is not the first time. There has always been a mismatch in terms of the needs of the mining sector and resource allocation,” Munthali said.
Mining expert Grain Malunga said the budget does not offer hope to the mining sector.
“We are doing so little to woo investors into the mining sector and we are not even giving incentives like other sectors such as agriculture, then how do we expect investors to come in? There is more we need to do,” Malunga said.
Figures from last year show that the mining sector contributes a meagre 1 percent to Malawi’s GDP growth but research has shown that the sector has the potential to contribute more.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
He is however flexible as he also writes about current affairs and national issues.
