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Extractive industry in a mess, says parliamentary committee

The Parliamentary Committee on Natural Resources and Climate Change says the extractive industry is facing many challenges; hence, the need to review some of the archaic mining laws.

In an interview after a panel discussion on the emerging issues in the extractive industry in Malawi organised by the Malawi Extractive Industries Transparency Initiative (Mweiti) in Lilongwe on Thursday, the committee’s chairperson Werani Chilenga said there is a lot that needs to be done, including stopping channelling taxes from the extractive sector to government’s consolidated account or Account Number One.

Rare earth samples at Songwe Hills in Phalombe

Experts have touted the extractive sector as key to boosting the country’s economy in the face of dwindling revenue from the agriculture sector, particularly tobacco.

“Government must create a special account for taxes from mining so that the money can be used to build roads and other infrastructure,” he said.

Chilenga said apart from relying on the Extractive Industries Transparency Initiative (EITI), the global standard for good governance of oil, gas and mineral resources, the country should also incorporate the Africa Mining Vision which has transformed countries such as Ethiopia, Botswana and Zambia to develop using revenue from the extractive industry.

“When they were formulating Mweiti, they left out Parliament and we are concerned with this because Malawi is being influenced by outside forces. Since Parliament provides an oversight role, we cannot just take what Mweiti is telling us as a wholesome truth,” he said.

But Malawi Chamber of Mines and Energy president Dean Lungu differed with Chilenga, arguing the mining sector is on the right path only that Malawians tend to speculate a lot.

“There are a lot of misunderstandings in the mining sector, but what people should know is that mining requires huge capital. This is the reason we have foreign firms dominating in this sector because  they have the required resources,” he said.

Lungu said it is not right to speculate that huge volumes of minerals go outside the country because nobody can carry stones for testing without knowing its real value.

ActionAid head of programmes and policy Peter Pangani agreed with Lungu, saying Malawi is on the right path regarding mining, and there is need to revisit mining regulations.

The first ever Malawi Extractive Industry Report was launched in July this year by Mweiti.

 

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