Despite its associated risks, illegal mining continues to escalate, a situation mining experts and economists are attributing to smuggling, high poverty levels and lack of economic opportunities.
Currently, it is estimated that 70.1 percent of Malawi’s population is living below $2.15 a day (K3 764.65), which is the World Bank’s poverty threshold.
In separate interviews during the week, the experts said there is need for the situation to be effectively managed by, among others, formalising small-scale mining, through which illegal mining is happening.
Mining is identified in Malawi’s long-term development blueprint—MW2063, as one of the key strategic sectors with potential to support industrialisation.
In the 10-year MW2063 implementation plan, Malawi aims to harness the mining sector through value addition and increase export of finished products.
Chamber of Mines and Minerals coordinator Grain Malunga in an interview said aside from formalising small-scale mining, there is need for cooperatives to be established.
He said: “Illegal mining is happening under artisanal and small-scale mining. This is due to escalating poverty.
“The only way to solve it is by establishing the causes and remove bottlenecks to formalise it through cooperative arrangements, facilitate financing and marketing of their mineral products.”
Malunga’s observations echo a March 2021 published study recommendation for government to support the sub-sector through cooperatives and securing credit facilities from financial institutions.
The study also recommended closing an existing knowledge gap by introducing mining desk officers in district councils.
Titled An Investigation of the Socio-Economic Benefits of Small-Scale Gold Mining in Malawi, the study observed that little is being done by the government to support the sub-sector despite the huge potential it presents to the economy.
Authors Theresa Mkandawire, Steven Ghambi, Gift Tsokonombwe and Tiyamike Haundi, stated that if well supported, government could immensely benefit from the sub-sector through taxes which could contribute to economic growth.
Reads part of the study: “Government could achieve substantial socio-economic development from the sector by revising the current artisanal and small-scale mining legislation so that it embraces the customary practices while safeguarding the environment and improving the tax collection base.”
Mining expert Ignatius Kamwanje also attributed the escalation of illegal mining to ready markets for gemstones and gold locally at the Reserve Bank of Malawi (RBM) through the Export Development Fund.
EDF, a subsidiary of RBM, has been buying gemstones and gold from local artisans and their brokers.
Kamwanje also attributed the situation to the gold rush in most districts, lack of a speedy implementation and formalisation of small-scale mining and smuggling of minerals by foreigners that use Malawi as a conduit.
Economics Association of Malawi president Bertha Bangara-Chikadza observed in an interview that despite the promising growth prospects of mining, the sector is only contributing 0.7 percent to the country’s growth domestic product (GDP).
But if well managed, she said mining can spur both economic and social development and generate significant revenue for government to increase fiscal space and ease public debt.
Mining is expected to grow by 5.6 percent and 8.5 percent in 2025 and 2026, respectively from 4.8 percent in 2024.
In its 20th Malawi Economic Monitor [MEM], the World Bank says Malawi has a unique opportunity to leverage its mineral wealth to drive sustainable economic development.
Published on the World Bank website on January 29 2025, the publication projects that Malawi’s mining sector could generate up to $30 billion in exports between 2026 and 2040.
Ministry of Mining is responsible for regulating and promoting solid minerals and the upstream petroleum sectors for socio-economic growth and development, with its operations aligned with the Mines and Minerals Act of 2019, Petroleum Act of 1983, Explosives Act of 1967 and MW2063.
