Malawi’s booming mining sector should result in increased funding, particularly to the Department of Mines, to enhance the development of institutional capacity, Citizen for Justice (CFJ), a non-governmental organisation (NGO) working in the sector, has said.
The NGO says an influx of mining, oil and gas companies demands that authorities should do more to take advantage of the prevailing opportunities in the sector.
The call also comes as government has prioritised mining as a potential strategic sector to spur the country’s gross domestic product (GDP)—one of the primary indicators used to gauge the health of a country’s economy.
CFJ further states that there are now increased expectations on the potential of the sector by the Malawi Government and the public at large, but cautions that there is need to match those expectations with tangible action.
“The department requires not less than K230 million and there is need to support Taxation Act to accommodate Extractive Industry Transparency Initiative (EITI). Government must consider the department to keep a certain percentage of revenue collected.
“This will support institutional capacity, institutional arrangement, better offices and equipment, set aside funds within Ministry of Finance to conduct reconciliation and monitoring visit in mines,” said CFJ in a pre-budget consultation paper.
According to CFJ, currently the department gets less than K115 million per fiscal year, which is way below what is needed to promote the sector.
“The government has to invest money in the sector if it has to reap benefits. There is need for Ministry of Finance to make sure that the sector contributes to societal expectations; economic benefits have to be seen. Implement EITI without further delay,” added CFJ.
A recent World Bank’s mineral sector review revealed huge potential for the mining sector both in the short and medium-term, leading to high expectations from government and communities especially those around mining ventures.
However, the move also comes as several NGOs have also cautioned that without proper monitoring in the mining sector, the country can lose its potential.