RBM banks on mining to spur economic growth
The Reserve Bank of Malawi says a rebound in the mining sector powered by the formalisation of artisanal mining and the introduction of structured markets for gold and gemstones will push up the country’s economic growth projections.
In its June 2023 issue of the Financial and Economic Review published last week, the central bank projects that the mining sector will grow by 3.3 percent this year, 0.8 percentage points higher than the 2.5 percent registered last year.
Reads part of the statement: “The Ministry of Mining is in the process of advancing the formalisation of the Artisanal and Small-scale Miners Act, which is expected to increase production of gemstones. The ongoing projects in the construction industry are expected to sustain demand for quarry in the year.”
RBM, through the Export Development Fund (EDF), an institution mandated to promote the growth and diversification of exports, started buying gemstones in February and is now ready to export to international markets.
EDF precious metals and mineral unit manager Elyvin Nkhonjera said the introduction of a structured market will help local authorities contain the smuggling of precious stones and ensure that the country collects more revenue.
She said: “In the past [before the introduction of the structured market], foreigners were mining and smuggling precious stones outside the country. They were bypassing the legal systems and were not paying the proceeds or taxes to the government.”
Nkhonjera said Malawi is ready to start generating revenue from precious stones after the EDF oriented artisanal miners on the quality and standards that are required in the international market.
She allayed concerns that Malawi would not get fair value for money if the country keeps exporting the gemstones in their raw form.
In an interview yesterday, mining expert Hewton Banda commended the direction EDF has taken, to train artisanal miner, but cautioned that government will have to finance them to unlock the mining sector’s potential.
He said: “The miners need to get financial support if want them to make meaningful contribution to economic growth.
“The benefit of empowering artisanal miners is that the proceeds from mining goes directly to the communities .”
Figures from the Treasury show that in the 2020/21 fiscal year, government issued 174 export permits for 13 tonnes of gemstones that were valued at K92.1 million.
