‘Malawi’s mining future looks bright’

Citizen for Justice (CFJ), an NGO in Malawi, is campaigning to have the country sign up for transparency initiative in extractive industries (EITI). The organisation recently conducted meetings with Members of Parliament, chiefs and media practitioners to sensitise them on the importance of EITI. Edwin Nyirongo asked CFJ’s executive director, Reinford Mwangonde, to explain what EITI is all about.

What is extractive industry transparency initiative (EITI)?

EITI is a tripartite initiative, which can only function with the active involvement of oil, gas and mining companies, government departments and civil society organisations all engaging in good faith. In essence, the initiative is grounded in a shared belief that the prudent exploitation of natural resource wealth should provide the basis for sustainable economic growth that contributes to sustainable development. It was launched by the former UK Prime Minister, Tony Blair at the World Summit on Sustainable Development in Johannesburg, South Africa, in Sept 2002. Other countries such as Liberia have EITI+, which also tackles forestry, and in others, it includes fisheries.

How many countries are supporting this idea (EITI)?

So far, they are 18 compliant countries and 19 candidate countries. All of Malawi’s neighbouring countries—Mozambique, Tanzania and Zambia—are compliant countries. Compliant means a country is meeting all requirements in the EITI standard and candidate means a country is implementing EITI, but not yet meeting all the EITI requirements.

 

 Why do you think it is necessary for Malawi to be a compliant country?

Malawi is now home to a number of local and multinational corporations with interest in extractive industries. Like many countries in Africa, Malawi is optimistic that mining ventures will translate into socio-economic development of the country. This, however, can only be possible if the country does not fall into the trap of the resource curse driven by poor governance. Secondly, the Government of Malawi has listed mineral development among its top five goals under the Malawi Growth Development Strategy II. Furthermore, mining is listed under the Economic Recovery Plan-(ERP) as one of the pillars to strengthen the country’s economy. It is, therefore, imperative that the country ought to establish mechanisms that will foster proper management and governance of natural resources wealth.

 

 Are there other benefits?

 

EITI will improve Malawi’s transparency index at the international level, and that has a number of benefits for this country, which is at the bottom of the governance index.  Up and above, the transparent collection, usage and auditing of resource revenues will increase Malawi’s economic growth, which may in turn help reduce poverty in a country dependent on agriculture.

 

Why do you think some countries still resist joining EITI?

There is a myth about EITI and some countries such as South Africa have not shown much interest in it. EITI is seen as another donor imposition, but that is not true because membership to this organisation is voluntary; any country can choose to join or not. Secondly, EITI is seen as a double standard tool against poor African countries, but this is illogical because the initiative has shown to benefit more African countries where resource curses have been rampart than in western countries.

 

 What is Malawi Government’s response to the matter?

The Government of Malawi has been exploring whether it can adopt EITI as a tool to enhance its collection, tracking and governance of revenue from extractive industries. The first national workshop on EITI took place in 2010 and a task-force comprising of government departments, civil society organisations and private companies was established to drive the exploratory processes. In essence, we have made strides as a country to show ample interest in EITI and there seems to be strong indicators from the President that she is serious about transparency.

 

 Are you satisfied with the way the mining sector in run in Malawi?

The country has a number of challenges at institutional level, policy/ legal frameworks and human capacity. The three factors combined have a huge factor in whether Malawi will benefit from its minerals. Government departments that govern the industry are under-funded and under-staffed. The policy and legal framework regulating the sector needs to be updated and officials in the Ministry of Mines need further capacity building.

 

 How do you look at the future of mining in Malawi?

Malawi has emerged as a frontier for international mining, oil and gas companies and that trend will continue because our geophysical characteristics are not isolated from our neighboring countries. The World Bank’s mineral sector review for 2009 predicts the generation of above $500 000 annually from the sector in the short to medium term and as most Malawians know, our neighboring countries are rich in minerals and Malawi is not exempted. In essence, the future looks bright.

 

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