Mining
Underfunding worries Malawi mining stakeholders
February 24, 2024 / Wahard Betha
Stakeholders in the extractive sector have expressed concern over continued underfunding to the Ministry of Mining describing it as a clear indication of government’s lack of interest towards the minerals sector.
For instance, in the previous financial budget, Ministry of Finance allocated to the Ministry of Mining a provision of about MK3,6-billion which was later revised to about K3,9-billion due to 44 percent devaluation of the Kwacha, which stakeholders has described as inadequate for the Ministry to efficiently conduct its duties.
The Ministry of Mining’s provision in the budget was much lower compared to other Ministries of Energy and Natural Resources which were allocated about MK18, 3-billion and MK12, 3-billion respectively.
Coordinator for Natural Resources Justice Network (NRJN) Kennedy Rashid told Mining & Trade Review that such underfunding to the Ministry of Mining signifies that the Ministry is not a priority in the budget.
Rashid said this is unfortunate as the same Government touts the mining sector as one of the main pillars of the Malawi 2063 economic agenda.
He said: “The challenge we have is prioritization. At times it seems we do not even follow Malawi 2063 in planning.”
“If financed and governed properly the mining sector can finance the social services. But by neglecting the Ministry, it implies that less focus is put on wealth creation.”
“We are not investing as urgently required in the sector. The Ministry of Finance should be following the priority sectors as per Malawi 2063.”
“We cannot attain our economic goals if we do not invest in our economic programs.”
Rashid said the minerals sector has the capability of generating sufficient funds to uplift the economy only if the government shows interest to invest in it.
The 6th Malawi Extractives Industry Transparency Initiative (MWEITI) report indicates that the mining sector alone generated funds amounting to about MK24, 4-billion from July 2020 to June 2021.
It is expected that due to continued underfunding, the Ministry of Mining will likely fail to fulfil plans and mandatory duties including; managing the development of mineral resources; monitoring and regulating operations of the mining industry; and monitoring of seismic activities.
The Ministry last year launched the 2023-2027 strategic plan whose implementation largely depends on the availability and efficient utilization of financial resources from the Ministry of Finance through the Program Based Budget covering both Recurrent and Development Expenditure; and funding provided by Donors, Development Partners and other bodies.
The Ministry of Finance has been conducting budget consultation meetings to solicit suggestions for the 2024/25 financial budget to be deliberated in the next sitting of parliament expected to run from February 9 to April 5, 2024.
Commenting on the issue, Coordinator for Chamber of Mines and Energy Grain Malunga agreed with Rashid suggesting that Government gives attention to wealth creation sectors including mining.
Malunga said: “My take on budget consultation is that 100% pro poor budgets promote consumption with minimum private sector growth.”
“Let us think seriously of wealth creation through technical education industry and trade.”
In a separate interview, Programs Coordinator for NRJN Joy Chabwera suggested that the government should develop a budget that will enhance the mining sector’s performance and impact in areas of; infrastructure, capacity building, transparency and accountability mechanism, community development, environmental protection, stakeholder engagement and consultations, research and data collection and, diversification of economy.
Chabwera said: “Allocate resources for capacity building programs aimed at enhancing the skills and knowledge of local communities, government officials and industry stakeholders.”
“They should also allocate funds for the establishment and maintenance of robust transparency and accountability mechanism in the extractive sector which includes supporting initiatives such as the Extractive Industries Transparency Initiative (EITI) implementation, which promotes disclosure of revenue flows and fosters public oversight of extractive activities.”
“On stakeholder engagement and consultations, I think it is good if they allocate a portion for stakeholder engagement and consultations processes to ensure that interests and concerns of all relevant stakeholders including local communities, CSOs, and industry players are adequately addressed in decision making processes related to the extractive sector.”
Chabwera also explained that through prioritization of these areas in budget allocation, the Ministry of Finance can contribute to the sustainable development of the extractive sector in Malawi, promote inclusive growth, and ensure that the sector benefits both present and future generations.
The Ministry of Mining is expected to undertake a mid-term review of its strategic plan in 2024/2025 financial year to establish progress made, whereby a full review of the plan will be conducted at the end of the implementation period in 2027.
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Rehabilitation:
The establishment of a stable and self-sustaining ecosystem, but not necessarily the one that existed before mining began. In many cases, complete restoration may be impossible, but successful remediation, reclamation, and rehabilitation can result in the timely establishment of a functional ecosystem.
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Remediation:
The cleanup of the contaminated area to safe levels by removing or isolating contaminants. At mine sites, remediation often consists of isolating contaminated material in pre-existing tailings storage facilities, capping tailings and waste rock stockpiles with clean topsoil, and collecting and treating any contaminated mine water if necessary.
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