Malawi has banned exports of gemstones and minerals and is reforming its mining sector to improve efficiency and transparency. The ban follows an order to review mining contracts due to significant unpaid taxes owed to the country. Despite its rich mineral deposits, Malawi’s mining sector currently contributes minimally to national income, prompting a push for better economic exploitation of its resources.
Malawi has enacted an immediate export ban on gemstones and precious minerals and halted the issuance of new mineral export licenses as part of a comprehensive reform of its mining sector. This government initiative aims to enhance efficiency and transparency within the administration of mineral rights, as stated by the Minister of Mining, Joseph Mkandawire.
This ban aligns with directives from the Vice President to audit all existing mining contracts, a process that will occur over a 21-day timeframe. Malawi is rich in mineral resources including uranium, rubies, and sapphires but has not fully capitalized on these assets compared to its regional counterparts.
In recent years, Malawi’s government has pursued substantial unpaid taxes and royalties from foreign mining firms. Notably, the government claims it is owed over $309 billion from Columbia Gem House for ruby exports, a figure significantly exceeding Malawi’s GDP.
The World Bank reported that Malawi’s mineral industry contributed a mere 3.5% to the national income in 2023. This underperformance contrasts sharply with potential forecasts, estimating that the sector could yield up to $30 billion in exports between 2026 and 2040 by focusing on high-demand “green minerals” like graphite and titanium.
With approximately 75% of Malawi’s 24 million population living in extreme poverty, the government’s mining reforms could play a crucial role in economic development. However, immediate actions such as the export ban show a commitment to rectifying past inefficiencies within the sector.
Malawi’s recent ban on the export of gemstones and minerals signifies an urgent realignment of its mining industry towards improved governance and fiscal responsibility. Amid ongoing efforts to recover substantial unpaid debts from foreign companies, the government is also exploring the sector’s potential economic benefits, especially concerning environmentally favorable mineral exports. These measures are critical for addressing poverty and enhancing Malawi’s economic landscape.
Original Source: clubofmozambique.com
