Mining sector growth has declined from 7.4 percent in 2019 to negative 4.1 percent in 2022 due to the negative impacts of the Covid-19 and market dynamics, Treasury has said.
The 2023 Malawi Government Annual Economic Report produced by Ministry of Finance and Economic Affairs indicates that during the review period, the contribution of the sector to the gross domestic product (GDP) remained 0.7 percent.
However, despite the subdued growth, Treasury projects the sector’s growth to rebound to 7.8 percent.
Reads the report in part: “The growth rate for 2023 is projected at 7.8 percent with the expectation of economic recovery as electricity production, a critical input in the sector, will bereinstalled at full capacity. In addition, the updated geological map under the geologicalmapping and mineral assessment project is expected to potentially increasemining activities.
“The initiatives by the government to formalise artisanal mining into miningcooperation will also boost the sector’s growth. Finally, the continued implementation of construction projects will also contribute to the increased growth in the mining sector in 2023.”
As of December 31 2022, Treasury data shows that Ministry of Mining had collected K724.3 million in revenue with revenues estimated at K964.9 million at the close of the 2022/23 financial year ending on March 31.
In the 2023/24 and 2024/25 financial years revenue is projected to rise to K1.013 billion and K1.063 billion, respectively.
On the other hand, the sector generated K953.1 million in mineral exports.
Mining is one of the priority areas under the industrialisation pillar in the country’seffort to achieve the upper-middle income status by the year 2063.
The sector has been billed as one of the areas that could help boost the economy, although its contribution to the country’s GDP registered no growth, stalling at 0.7 percent in the past five years.
In the long-term, through Malawi 2063, the country’s long-term development strategy, government plans to increase this contribution to GDP to 10 percent
Speaking in an interview yesterday, energy expert Grain Malunga observed that the performance of the sector hasbeen affected by the disruption caused by Covid-19 and poor electricity supply, with future prospects hanging in the balance.
He said: “The projected growth rate will not be achieved due to continued delay in restoring energy supply on Kapichira hydro electric plant. Demand for quarry aggregate will slightly improve growth rate in construction industry.
“If the government commits itself to work with the private sector in concluding mining agreements sooner than later, the growth of the sector will surpass eight percent of GDP by 2026.”
In his State of the Nation Address last month, President Lazarus Chakwera said this financial year, government will strengthen the enforcement of mining laws and regulations including the Mines andMinerals Act of 2019 and the Reserve Bank of MalawiAct of 2018.