Mining

Funding woes choke Ministry of Mining

February 14, 2022
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By Wahard Betha

Despite the minerals sector ranking high in Malawi 2063 development agenda, the Ministry of Mining says it is struggling to implement some of its planned development activities due to inadequate funding from the treasury.


Malawi 2063, under the pillar of industrialization, recognizes the mining sector as one of the game chargers for the country’s economy and projects to increase the mining sector’s current 1% contribution to Gross Domestic Product (GDP) to the range of 10 – 20 %.


But Acting Director for the Department of Mines in the Ministry of Mining Burnet Msika told Mining & Trade Review that underfunding is weighing on the implementation of a number of activities to develop the sector including the long awaited decentralization of the Department in order for some processes to be done at district level.


He said for the decentralization process to be implemented, it requires recruitment of staff and other necessary processes which are not possible without resources.

Msika said: “Under the decentralization strategy, we cannot recruit people without approvals from the Human Resources Department and for them to play their role in the recruitment process they also need availability of resources which is tricky.”


“For those people to be recruited, they will need to be working in the fields not just sitting in the offices and for that to be possible, the resources have to be there as well.”

He also said the Department is falling short of funds to train 32 groups of Artisanal and Small-scale Miners (ASMs) which were formulated when the Reserve Bank of Malawi introduced the structured market for gold.

“We are lacking funds to train these ASMs in sustainable mining and value addition as well as giving them appropriate mining equipment because currently they are only getting 30% of gold while the rest is being eroded away due to poor methods of extracting it,” said Msika.

Msika also said the Ministry planned some activities like grass-root exploration works mandated to be done by the Geological Survey Department (GSD) in order to generate enough data to attract investors but are failing to take place due to lack of funds.


He, however, said as a Ministry, they are engaging potential donors to source funds that can be used to implement some of the projects.

Msika said: “We are not blaming the Government because we know that there are some financial challenges going on across different Ministries, Departments, and Agencies.”
“As a Ministry, we are trying to lobby with the Ministry of Finance as well as donors so that if there is an opportunity somewhere they can assist us to develop the sector.”


“Good enough in Malawi 2063 mining is featured highly. There is much political will to support the mining sector giving us much hope that something will happen to the sector.”

“We are very optimistic that things will change. So far the government has initiated the process to recruit officers and we believe that some will be incorporated in the decentralization program for our Ministry.”


Responding to the development, Public Relations Officer for the Ministry of Finance Williams Banda said the treasury is committed to support the mining sector in any strategic aspect as long as it aligns with the MW2063 national development agenda.


Banda tipped the Ministry to prioritize the specific strategic areas for the coming financial year and submit to the treasury to act upon them.


He said: “We usually target each Ministry’s strategic issues and the Ministry of Mining is one of the emerging areas for development. If they do the needful they have the full support from the treasury.”


“The mining sector is one of the priority areas that the Government through the MW2063 relies on in terms of boosting the country’s economy and I do not think if they can submit any strategic plans aligning to the agenda the treasury can be reluctant to support them.”


However, Natural Resources Justice Network (NRJN) Programs Coordinator Joy Chabwera challenged the Malawi Government to be financially committed if it is serious to make the mining sector a priority.

Chabwera said as Civil Society Organizations (CSO) they believe the Ministry lacks seriousness in terms of decentralization adding that they make promises that they fail to fulfil.

He said: “CSOs have lobbied with the Parliamentary Committee on Natural Resources and the chair of the committee assured the Ministry of increased budget to fulfil the same and we expected the Ministry to do better this time around.”


“We advise the Ministry to also be creative and raise funds because this sector is a lucrative sector which should bring revenue in the country and as a Ministry, it should not be giving excuses of lack of resources.”

“We also call upon the Ministry to put their house in order to curb corruption in the licensing activities.


Presenting the 2021/22 financial budget in parliament, former Finance Minister Felix Mlusu promised that during the financial year, the Government will undertake a number of activities to enhance growth of the mining sector.

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