Extractive industry revenue down 10% to k5.3bn—report
Malawi has earned K5.3 billion in revenue from the extractive industry, the second Extractive Industries Transparency Initiative (Mweiti) report shows.
This is a 10 percent drop from the 2015 revenue which stood at K5.93 billion.
A breakdown of the report which was released last week shows that the forestry sector raised a big chunk amounting to K2.5 billion.
This represents a 12 percent drop compared to K2.9 billion released from the sector in 2014/15 financial year.
The mining sector came second with a K1.61 billion contribution.
This means revenue collected from the mining sector has dropped by 31 percent compared to K2.3 billion raised in 2015.
The sector’s contribution to the gross domestic product (GDP) is minimal following the suspension of production at Kayerekera Uranium Mine in Karonga and that most companies in the sector are in exploration stage.
In the year under review, transport sector contributed K951 million while oil and gas contribute K211 million in contrast to K674 million collected in the previous year.
As it is, revenue collected from the oil and gas sector has dropped by 69 percent.
According to the report, the revenue generated in the year contributed 8.2 percent to the GDP) and a minimal 0.8 percent to government revenue.
The report further says the mining and forestry sectors only contributed 0.6 percent to the country’s exports.
The Mweiti Report further tabulates that Malawi Revenue Authority (MRA) collected 70 percent of the total amount generated followed by Department of Forestry at 17 percent.
Ministry of Transport and Publix work collected six percent while five percent was from Department of Mines and a two percent from social contributions.
In an interview on Thursday Malawi Chamber of Mines and Energy president Dean Lungu confirmed the slow revenue in mining largely due to the suspension of production at Kayerekera Uranium Mine which is now under care and maintenance.
Lungu said most companies in the mining sector are in exploration stage and not actual mining.
“Developing a mining investment takes a long time to start giving out revenue. There are phases which involve reconnaissance and then exploration which can take one to three years before the actual mining starts,” he explained.
He asked Malawians to be patient with the sector as it might start bringing revenue in future.
“We are in a hurry when a company is doing exploration, people think they are already into actual mining. But it is not like that, let us give the sector time,” he said.
Malawi joined an Extractive Industries Transparency Initiative (Eiti) candidate country in October 2015.
The Mweiti process covers three sectors: mining, oil and gas, as well as forestry.
The country published its first EITI report covering the 2014/15 financial year in April 2017. n
