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Malawi needs to support large scale mining investment

As reported in our article on Page 10, Sovereign Metals, which is prospecting for rutile and graphite at Kasiya and Malingunde, is investing in several initiatives to assist in the development of Malawi and its local communities

Malawi is benefitting from Sovereign’s exploration projects through employment and on-the-job training as the Company continues to expand its investment in the country.

Sovereign is also creating employment benefits by recruiting and training employees from their respective exploration project areas.

In addition, the company employs local people for additional assistance on a temporary basis during exploration drilling programs.

Sovereign has established international standard mining industry facilities in Malawi, a notable example being a large-scale rutile sample laboratory in Lilongwe.

As the Company’s MD Julian Stephens is quoted in the article, with the facility in use, Sovereign is now able to process samples to an international standard in Malawi, keeping significant expenditure, training and employment in Malawi rather than sending the samples offshore.

The Company is also investing in education as part of Corporate Social Responsibility (CSR) whereby it has identified four schools in the neighboring community of Kasiya which will significantly benefit from access to additional learning materials and upgrades to their learning environments. At this stage, the Company is sponsoring eight Form 1 students in form of bursaries.

It has also constructed a community centre at Malingunde to provide a decent venue for the local community to hold development meetings and has commissioned water boreholes across its licence areas to provide local communities with safe drinking water.

We commend Sovereign Metals for these initiatives as the Company is yet to start mining in its tenement areas with Kasiya, which the Company has just proven as the largest rutile deposit in exploration stage while it has just applied for a mining licence for Malingunde after completing studies.

We, therefore, urge government and Malawians at large to support the activities of the company so that it is encouraged to bring more investment into Malawi.

The motto for this year’s Independence Day “Rise! For a resilient and prosperous Malawi augers well with the situation in Malawi.

It is indeed time Malawi rises to make decisions in support of large scale mining projects that have the potential to turn around its economic fortunes and create resilience against economic shocks created by Covid-19 and the war in Ukraine.

Reduce expenditure on maize subsidies to support agricultural commercialisation

Food security is important for any country as hunger and malnutrition are enemies of development of any nation. It is for this reason that the Malawi Government has all along been investing in agricultural subsidies to enable smallholder farmers produce adequate food crops especially maize which is the country’s major staple crop.

But as reported in our lead article, the huge budget for maize subsidies is weighing heavily on allocations to development of potential agricultural commercialization and diversification areas such as production of legumes for export.

In the Country Private Sector Diagnostic Report dubbed Creating Markets in Malawi, the World Bank urges Government to increase resource allocation for productive investments in the agricultural sector, including by reviewing and adjusting the AIP to improve efficiency in terms of distribution, targeted farmers most likely to benefit from the subsidy, and fiscal sustainability. It says though the roll out of AIP and beneficial weather conditions have resulted in bumper harvest, the longer term effects and implications of the AIP need to be closely monitored.

The Bretton Wood institution laments that the budget allocation for the AIP absorbs nearly half of the overall agricultural budget crowding out productive investments in the sector that could promote commercialization and more sustainable farming practices.

It says Malawi already suffers from an overdependence on maize, which drives soil degradation and increases vulnerability to climate shocks and pests, like the fall army worm.

The Bank also points out that continued focus on maize input subsidies reduces fiscal space to invest in other important sector priorities, such as irrigation and extension services.

We agree with the World Bank in urging the government to work on finding an exit strategy for the AIP as it moves to commercialise and mechanise the agricultural sector to support industrialisation as reflected in Malawi 2063.

We feel it is high time government concentrated on assisting farmers to form cooperatives and acquire loans to procure improved seeds, fertiliser and machinery for their agricultural activities.

As stated in the World Bank report, years of subsidizing peasant farmers have not benefited the country as yields have largely stagnated over the last decade despite the subsidy programme. Just as the report says, it is also imperative for the Malawi Government to channel a percentage of the funds going to maize subsidies to irrigation infrastructure and extension services to improve climate-smart agricultural practices which would help to boost resilience to shocks.

It is high time government assisted more subsistence farmers to graduate into commercial agriculture other than continuing to subsidise their production at peasant level.

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