Ministry of Natural Resources, Energy and Mining is lacking technical expertise in gemstone valuation and grading to ensure proper pricing of the precious stones, Business News has learnt.
The ministry’s spokesperson Levison Undi said the ministry has one gemologist who reported for duties last month and he is currently training his counterparts in Department of Mines.
“We realised that one officer in this field is not adequate with reference to the number of people doing small-scale mining in the country,” he said, adding that government is losing a lot of money due to smuggling of minerals, but the ministry has not yet computed the figures to determine the extent of the loss.
Catholic Commission for Justice and Peace (CCJP) national secretary Chris Chisoni said it is unfortunate that while a lot is happening in the sector, it is not documented.
“The sector is not fully developed; it lacks technical experts and capacity building in human resources to manage it which is not tallying with the fast pace at which the industry is growing,” he said.
Chisoni said it is difficult to document illicit financial flows in the country because there is critical deficiency in documentation process.
“It is even a challenge to know how much investors are generating from the sector because they are not obliged by law to publish what they generate in the absence of laws to access information,” he said.
Africa is losing an estimated $50 billion (K22.5 trillion) every year due to illicit financial flows mostly from the resources sector, according to general secretary for Common Market for Eastern and Southern Africa (Comesa) executive secretary Sindiso Ngwenya.
In a statement last week, Ngwenya said institutions mandated to supervise operations in the sector face serious capacity challenges
He said regional economies fail to benefit fully from linkages, which emanate from a well-integrated mineral sector and the multitudes of economic multipliers along the mineral value chain due to limited processing of minerals domestically.
“The lack of linkages between minerals exploitation and the regional economies, the enclave nature of the sector, is the reason mining has a weak developmental footprint in Comesa,” said Ngwenya.
He said this has led to high levels of illicit financial flows from the sector through transfer pricing and other such vices and the failure to deploy revenues towards meaningful development projects.
Ngwenya attributed this to poorly negotiated contracts and limited capacity of governments to audit the mineral value chain to plug leakages.
The Malawi Growth and Development Strategy (MGDS II) identifies mining as one of the priority sectors, which has potential to raise export earnings and promote economic growth.