Plans to roll out a Sovereign Wealth Fund (SWF) anchored on mining revenues have moved a step closer after stakeholders validated the proposal at a high-level meeting in Lilongwe on Tuesday, signalling growing policy momentum behind the initiative.
SWF is a State-owned investment fund model used by governments to manage national wealth, stabilise the economy and generate long-term financial returns.
During the validation meeting, stakeholders reviewed findings from a feasibility study and endorsed a proposed model seeking to transform mining proceeds into long-term national wealth.
Presenting the proposal, SWF Technical Taskforce chairperson Adwell Zembele said the fund is designed to shift Malawi’s fiscal structure from consumption to investment by ring-fencing mining revenues for strategic use.
At its core, the fund seeks to stabilise public finances, support long-term investment and preserve wealth for future generations.
President Peter Mutharika and Minister of Finance, Economic Planning and Decentralisation Joseph Mwanamvekha announced the formation of the fund in the State of the Nation Address and 2025/26 National Budget Statement, respectively.
The proposed structure combines an Earmarking Fund and a stabilisation component to cushion the economy against commodity price volatility and an investment arm, the Strategic Investment Fund focused on financing high-impact sectors.
He said: “If we use the revenues for salaries or daily expenditure, they will be gone.
“We need to invest in ventures that will grow the economy for both current and future generations.”
The feasibility study estimates that mining could generate between $6 million (about K11 billion) and $600 million (about K1 trillion) annually, depending on production levels, global prices and the pace of sector development, highlighting both the opportunity and uncertainty underpinning the fund.
Zembele said Malawi’s current fiscal model remains heavily consumption-driven, limiting its ability to finance productive investments, but cautioned that the success of the fund will hinge on governance and institutional discipline.
“It is one thing to have the finances and another to ensure effective use of those funds,” he said, stressing the need for strong legal frameworks, independent oversight and transparency to avoid mismanagement.
Zembele warned that weak systems could expose the fund to political interference or inefficient allocation of resources, undermining its long-term objectives.
During the launch, Reserve Bank of Malawi Deputy Governor for Operations Kisu Simwaka said while the concept is sound, its effectiveness will depend on how well it is integrated into the broader macroeconomic framework.
He warned that without clear operational rules, sovereign funds risk becoming parallel fiscal channels that weaken budget discipline.
Simwaka said the central bank will play a key role in ensuring that the fund supports macroeconomic stability, particularly in managing liquidity and aligning it with national development priorities.
On the other hand, British High Commission deputy development director Tanya Geleff said the initiative reflects Malawi’s ambition to manage its natural resource wealth more strategically and transparently.
“The vision is to ensure that proceeds from mining benefit citizens now and in the future,” she said.
Geleff said the proposed fund could strengthen Malawi’s position as a credible investment destination, particularly as global demand for critical minerals grows.
“This is a moment for Malawi to position itself as a trusted and responsible investment destination,” she said, adding that the UK’s partnership with Malawi is focused on growth, investment and trade, and that initiatives such as the sovereign wealth fund can help build investor confidence.
“The plan sends a clear message that Malawi will grow transparently and in the long-term national interest,” she said.
The proposed fund is expected to be rolled out in phases. The government intends to set up the fund and its minerals sub-fund and later draft a Sovereign Wealth Fund’s legal regulatory and governance frameworks.
The next phase will involve setting up a board of governors, which will then set up the operational policies and guidelines. After all the steps are undertaken, the government will set up the SWF.
