Malawi could earn more than $500 million a year from mining if several high-risk mineral projects went ahead.
But the World Bank cautions that the sector is unlikely to deliver the transformational payout many Malawians expect unless radical and drastic reforms are in place.
In its latest Public Finance Review titled ‘Restoring Stability, Rebuilding’, launched on Tuesday, the bank estimates that government revenues from mining, under a more realistic “bus ines s -as -usual” scenario, could reach just over $200 million a year by the early 2030s.
This is on the assumption of a full operationalisation of the only two low-and medium-risk projects— Kayelekera uranium mine and the Kasiya rutile project.
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In the report, the World Bank says these revenues would account for roughly 10 percent of today’s government income and about 2 percent of gross domestic product (GDP), while the bulk would come from corporate income tax, with much smaller contributions from royalties and dividends.
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“While this would ease fiscal and foreign exchange pressures, the expected revenues would not be transformative— comparable to peak donor budget support before the 2013 ‘Cashgate’ scandal and about half of current interest payments,” the report states.
It adds that a more optimistic “unconstrained” scenario adds several high-risk ventures, including Makanjira heavy sands, Kangankunde rare earths, Songwe Hill rare earths, Kanyika niobium and Malingunde graphite, which, if they materialise, could see mining revenues rising to about 5 percent of GDP.
But the report warns that both export and revenue forecasts are highly uncertain, except for Kayelekera and Kangankunde, as none of the major projects has reached a final investment decision.
According to the bank, export and revenue forecasts from the sector come with significant uncertainty, adding that the country’s challenging macroeconomic conditions, poorly developed infrastructure and opaque licensing processes continue to deter investors.
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According to the report, Malawi will need at least five to ten years before mining begins delivering substantial fiscal benefits.
The group also highlighted challenges in the Malawi government’s ability to negotiate fiscal terms effectively due to lack of negotiation skills by MDAs
‘To address this, Malawi should ensure adequate experience and technical support, including engaging transaction advisors who provide expertise and on-the-job learning.” It adds.
Mining policy expert Paul Mvula lamented the slow pace at which the country has been moving in developing the mining sector, including slow investments in infrastructure.
“If the country were to achieve economic growth, this sector is vital in that regard. But we cannot grow unless we have the infrastructure in place and reliable power to move forward,” Mvula said.
Commenting on the report, economist Velli Nyirongo said the latest outlook by the World Bank meant mining could not be viewed as an automatic economic breakthrough but as a sector that requires deliberate reforms, strong governance, and capacity to convert resources into tangible national gains.
“This is both a warning and an opportunity for Malawi. There is a need to strengthen institutional capacity, particularly in contract negotiation and regulatory oversight,” Nyirongo said.
The World Bank had earlier estimated that Malawi could generate up to $30 billion from mineral exports between 2026 and 2040, with annual revenues expected to hit $3 billion by 2034.
The country has vast mineral deposits including gold, graphite, uranium, and rare earths.
