AMN - Malawi can benefit from outside support – comment by Yolanda Torrisi

Malawi and other African nations not benefiting effectively from exploitation of their natural resources need to take the advice offered by Botswana, one of the continent’s more friendly mining jurisdictions. During a recent visit to Malawi, Botswana’s President Mokgweetsi Masisi said his government was ready to support Malawi in developing its mining sector.

In order to facilitate this support, he said Malawi first needed to put in place proper legislation and build befitting technical capacities and strategies. Governance and effective legislative architecture remain vital in moving along this path.

“There are certain techniques, technologies and competences but more than anything else it is the governance, the legislative architecture. We have been through it like many countries have,” he said.

“We don’t claim to be superior we just claim to have derived the most in our experience. We started from zero but our first negotiation position has proved to be the right one.”

While his comments pertain specifically to Malawi, there is no reason why other African nations with less developed mining sectors should not be seeking support from outside, particularly from other more experienced African jurisdictions.

President Masisi’s statements follow claims by local mining experts that it would be too ambitious for Malawi’s government to count on mining as a revenue source in the short term as the sector was still in its infancy.

The Malawi Growth and Development Strategy review report states that the country’s mining sector is constrained by technical capacity, governance and weak geological information.

The Botswanan visitor said that this was the right time for effective legislation to be put in place. He said Botswana had done well because it brought in external experts to start mining and put in place appropriate legislation.

He told the media: “Part of the mineral legislation in Botswana demands that anything found belongs to the State and if anybody wants to go after it as an investor they will be given permission but they are licensed after due diligence.

“Even after licensing, because the mineral wealth in its raw form belongs to the State, they will pay a royalty for what they get so there is a valuation system to determine what it costs.

“You need to develop all these competencies. We are not fully there yet but we have moved a great deal in the plus-minus 40 years we have experience in mining and we hope you will never negotiate wrong.”

Government officials from Malawi appear to be ready to take up the offer as they have started negotiations on how to benefit from their expertise.

This follows a deal with Paladin Africa regarding the Kayelekera Uranium Mine in Karonga, which President Mutharika said had resulted in the country losing a great deal due to a poor agreement that did not favour the nation.

Yolanda Torrisi is Chairperson of The African Mining Network and comments on African mining issues and the growing global interest in the continent. Contact:yolanda@yolandatorrisi.com