Governance and industry experts have warned that Malawi is losing billions through illegal mining, weak oversight and outdated laws, as the country pursues plans to turn mining into a major export and revenue source.
The concerns were raised in Lilongwe on Friday during the launch of a mining governance assessment commissioned by the Natural Resource Justice Network (NRJN) with support from the United Kingdom Government.
The review analysed eight Extractive Industries Transparency Initiative (MWEITI) reports published between 2014 and 2023 and found major gaps in data accuracy, revenue reporting and production disclosure across mining, forestry and oil and gas.
Presenting the findings, governance specialist Mavuto Bamusi said Malawi remains stuck in a “paradox of wealth and poverty,” where vast mineral resources coexist with deepening economic hardship.
He said: “Malawi is sitting on rich mineral wealth, yet most Malawians continue to live in deep poverty.
“Through illegal mining, under-reporting and weak enforcement, this country is losing billions of kwacha.”
Bamusi said illegal mining has become widespread in Kasungu, Mangochi and Balaka, weakening revenue collection and fuelling illicit financial flows. He also said that mining currently contributes only about one percent to gross domestic product (GDP) despite its potential to ease the foreign exchange crisis.
He noted that Malawi has taken positive steps, including banning exports of unprocessed minerals and updating mining legislation, but warned that reforms must now move from paper to practice.
“To unlock value, Malawi must seal leakages, modernise laws and strengthen enforcement.
“If the extractive industries are managed well, this economy can improve significantly. But until then, the promise of mining will remain just that — a promise.”
According to the review, key discrepancies include duplicated tables in official reports, mismatched revenue figures and conflicting production volumes. Some companies did not disclose full output or earnings, while others operated without proper licences.
The study recommends deployment of specialised government negotiators to match multinational mining firms, establishment of a beneficial ownership register, and sanctions for companies that fail to submit complete data.
Land and compensation concerns
Industry representatives agreed that reforms are needed, but stressed that some disputes stem from outdated land and compensation laws rather than corporate abuse.
Sovereign Services Limited country manager and Malawi Chamber of Mines and Energy president Maxwell Kazako said compensation calculations are done by government under laws developed when land had little commercial value.
He said mining companies do not purchase land, but compensate for temporary loss of use. He cited a rehabilitation trial at the Kasiya graphite project, where land was restored and crop yields reportedly improved.
“That is the model every miner should follow,” he said.
British development adviser Natali Mitchell-Bennet, who is also Foreign, Commonwealth and Development Office team leader, reaffirmed the UK’s commitment to Malawi’s governance reforms.
She acknowledged Malawi’s progress on compliance and revenue disclosure and said the UK is partnering with the Malawi Anti-Corruption Country Support Strategy to address bottlenecks.
Mining is one of the four major priority sectors alongside agriculture and tourism and manufacturing collectively called ATMM to stimulate economic growth and achieve the Malawi 2063, the country’s long-term development plan.
Before the Kayelekera Uranium Mine in Karonga was put on care and maintenance in February 2014, mining used to contribute about 10 percent to GDP, but since then, its contribution to the economy is hovering around one percent, according to the Malawi Government Annual Economic Report 2024.
