Mining & Trade News

By Wahard Betha

A World Bank report has forecast that contribution from the mineral sector could reach five percent of Gross Domestic Product (GDP) by 2033, depending on whether certain high-risk projects are completed and whether government can successfully capture revenues.

The report indicates that the expected fiscal benefits of mining development will likely require between five and 10 years to materialize and are subject to considerable uncertainty.

In its latest Malawi Economic Monitor report, the World Bank draws the estimates based on the status of the Kayelekera Uranium Mine in Karonga, which has just resumed production and the Kasiya-Rutile-Graphite Project in Lilongwe currently undergoing feasibility studies.

The Malawi Government also signed agreements for the Kanyika Niobium and Songwe Hill Rare Earths projects, which are advancing to the permitting stage.

The report reads: “In a ‘business as usual scenario’, including only two low- and medium-risk projects (the Kayelekera uranium mine, and the Kasiya rutile mine), annual fiscal revenues from mining would increase to over US$200 million by the early 2030s, equal to approximately 10 percent of total fiscal revenues in the 2024/25 fiscal year, or about two percent of current GDP.”

“The ‘unconstrained’ scenario includes additional high risk projects (for heavy sands in Makanjira, rare earths in Kangankunde and Songwe Hill, niobium in Kanyika, and graphite in Malingunde), significantly increasing revenue potential.”

Progress on large-scale mining projects has continued and as noted in the previous Malawi Economic Monitor (World Bank 2025b), mining is positioned to become the largest export sector and a significant source of revenues within the next decade.

The mining sector is believed to be a game charger for growth of the country’s economy through influx of foreign exchange which remains the main challenge to the businesses.

According to the report, throughout the first half of 2025, businesses struggled amidst continued macroeconomic deterioration and operational obstacles due to high inflation and insufficient foreign exchange to meet input demand which triggered depreciation of the Malawian kwacha on the parallel market, with a pass-through effect on local prices.

The report says managing operational costs was also a challenge, with the return of load-shedding and fuel shortages acting as a drag on productivity. 

The World Bank says a long-term policy solution to the structural challenges in the foreign exchange market has yet to be put forward by the authorities, despite some easing of strict emergency measures and that access to foreign currency remains the paramount concern of most private sector actors.

It says: “The onset of the tobacco and macadamia harvest season, which traditionally boosts foreign exchange inflows through exports, has yet to have a major impact on reserves or on the spread between the official and parallel exchange rates.“

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