Govt mining firm in 79% funding deficit
The National Mining Investment and Development Corporation faces a 79 percent funding deficit following Treasury’s decision to allocate just K2.5 billion out of the requested K12 billion, it has been established.
The deficit is delaying the roll out of the firm, which was registered four years ago and was meant to kickstart operations between 2022 and 2023, according to the National Planning Commission (NPC).
NPC data shows that Ministry of Mining asked for K12 billion for recapitalisation of the firm, which is expected to operate under Malawi Developoment Corporation (MDC) Holdings Limited.
The mining firm is expected to drive the agenda of facilitating joint ventures by supporting establishment of large private mining firms, largely promoted under public-private partnerships as outlined in the Malawi 2063 First 10-Year Implementation Plan (MIP-1).
NPC director general Thomas Chataghalala Munthali observed in a written response that small resource allocations to the sector have delayed the mining development agreements and capitalisation of the National Mining Investment and Development Corporation.
He said: “Going by the MIP-1 targets, more would have been required for the mining sector as one key productive sector that needs urgent operationalisation.”
“Despite its modest contribution to the national income, the mining sector holds significant promise.”
Munthali said by harnessing strategic minerals such as uranium, rare earth elements, niobium, gold and gemstones and aligning them with local production of essentials such as fertiliser, steel, and energy, Malawi can promote import substitution and unlock high-value export opportunities.
The 2023/24 MIP-1 Progress Report indicates that value addition of minerals within the country will not only enhance returns from these resources, but also generate employment opportunities for Malawians.
Although mining is one of the priority areas under the industrialisation pillar in the country’s bid to achieve the upper-middle income status by 2063, little resources are allocated to the sector, a development which could threaten the development of the sector and hinder its potential growth.
Mining, which is part of the ATM strategy standing for agriculture, mining and tourism, is envisaged to grow the economy in the short to medium-term for the country to achieve the lower middle income status by 2030.
In the 2024/25 financial year, for instance, although allocation to mining has increased by 119.6 percent, its share of the total government expenditure is minimal at 0.15 percent or K8.746 billion out of the K5.978 trillion 2024/25 National Budget.
In the previous year’s budget, the share of mining allocation in the budget stood at 0.1 percent, from 0.7 percent and 0.1 percent in the 2022/23 and 2020/21 financial years, respectively.
Geologist Grain Malunga said in an interview on Tuesday that investment in a State-owned mining company is critical for enhancing development of the mining sector.
Data from the Malawi Government Annual Economic Report 2024 shows that the share of mining to gross domestic product has declined from 0.7 percent in 2021 to 0.6 percent in 2023 against the MIP-1 target of 2.5 percent.
