Nico Holdings plc says Malawi can generate more revenue from the mining sector if the country ventures into mineral processing.
Speaking during a stakeholder engagement in Blantyre on Wednesday, Nico Holdings plc managing director Vizenge Kumwenda said the Malawi Stock Exchange(MSE)-llisted financial services group has engaged a mining expert to help track progress and understand the sector.
“We believe that our companies could provide services once the industry is developed. We have the capacity to push the developments in the sector which others, including government, do not have,” he said.
a mining expert | Grace Phiri
Mining, which is part of the agriculture, tourism, mining and manufacturing strategy (ATM+M), is touted as one of the key drivers to grow the economy in the short to medium-term for the country to achieve the lower middle-income status by 2030 and an upper middle income economy by 2063.
Currently, the sector contributes about one percent to the gross domestic product (GDP), but before Kayelekera Uranium Mine in Karonga was put on care and maintenance in February 2014, the sector used to contribute about 10 percent to the GDP.
Malawi has eight energy transition minerals projects in the pipeline evaluated as potentially economically viable, including Kayelekera Uranium Mine, Kasiya Rutile and Graphite Project in Lilongwe, Kangankunde Rare Earth Elements Project in Balaka, Kanyika Niobium Mine in Mzimba, Songwe Hills Rare Earth Elements Project in Phalombe and Makanjira Heavy Sands in Mangochi.
In its analysis of the mining sector, the World Bank noted that several factors could prevent Malawi from fully leveraging the potential of the mining sector to drive long-term growth and poverty reduction.
Reads the analysis in part: “In Malawi, limited institutional capacity, weak sectoral governance and inadequate infrastructure pose especially serious risks.
“Unrealistically high stakeholder expectations regarding the mining sector’s impact on job creation, infrastructure improvements, and fiscal revenue pose challenges for policymakers.”
Meanwhile, the financial services group says it is prioritising initiatives that will benefit the shareholders more, including investments into the Magwero Industrial Park in Lilongwe, than listing an existing company and changing ownership or giving the public its own shares directly.
In 2023, Nico Holdings plc said it was pondering listing its subsidiary Nico Life Insurance Company Limited on then 16-counter MSE as calls from shareholders mounted to consider taking that route.
Last year, the firm’s management indicated it will take up the issue with their board and major shareholder Sanlam and also to take into account the costs and benefits of listing as well as engage other shareholders before proceeding.
Nico Holdings plc subsidiaries include NBS Bank plc, Nico Asset Managers Limited, Nico General Insurance Company Limited, Nico Life Insurance Company, Nico Capital Limited, Nico Insurance (Zambia) Limited and Sanlam General Uganda Limited and Sanlam em Mocambique.
