Mining & Trade News

The World Bank says Malawi’s mineral exports have the potential to replace tobacco as Malawi’s top foreign exchange earner within six years of production.

This is outlined in the 2024 Malawi Economic Monitor report released by The World Bank.

The report establishes the promise of mining exports to fuel economic development and validates the sector’s role as a central driver of growth and industrialization.

The report further emphasizes that mining can contribute significantly to the country’s public revenues.

“Potential fiscal revenues could contribute to more than 10 percent of total public revenues,” the report reads.

However, the report shows that the promise of mining will take some years to fully materialize and hinges on adequate policy.

“The pace and progression of mine development in Malawi relies not only on the technical aspects of the projects but equally on the governance of the sector,” explains the report.

It says key factors such as an appropriate fiscal regime, streamlined permitting, strong community engagement, and sufficient infrastructure will shape the mining sector’s trajectory as highlighted in the report.

While mining presents promising opportunities, the Brettonwood institution acknowledges that translating the proven resources in the ground into wealth for ordinary Malawians remains a critical challenge.

“The capital-intensive nature of the mining industry limits potential employment, with the researched projects only expected to generate 20, 000 jobs,” it says.

The report, therefore, highlights the importance of not neglecting other employment-intensive sectors and cautions the country against falling into the “presource curse” trap, where mining revenues are spent prematurely before they materialize.

The report states: “The government also needs to avoid falling victim to the “presource curse,” by spending mining revenues which may never materialize”.

Amidst the ongoing economic crisis, the report notes that Malawi has seen a decrease in imports of fuel and fertilizer compared to pre-crisis levels, even though their share in the total value of imports has been rising.

“Recent revisions of Malawi’s trade data show that fertilizer and fuel accounted for 27.1 percent of imported value since the start of 2022, compared to 18.8 percent two years earlier. However, this still represents 6.1 percent fewer liters of fuel and 30.6 percent fewer bags of fertilizer, reflecting the substantial increase in the cost of both commodities over the past two years,” reads the report.

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