AMN - Malawi vision for improved investment - comment by Yolanda Torrisi

In order for Malawi to benefit more from its mineral resources the government needs to engage more effectively with mining companies and a two-year project initiated by the African Minerals Development Centre (AMDC) aims to make this possible.

The project, ‘Strengthening the capacity of African governments to negotiate transparent, equitable and sustainable contracts in the Extractive Industries for broad-based sustainable growth and socio-economic development’, is being piloted in five countries – Malawi, Chad, Congo, Equatorial Guinea and Niger.

It encompasses training for stakeholders to more adequately negotiate deals with mining investors who tend to be more technically equipped and experienced in this area than most government or departmental officials.

In Malawi the project included a five-day African Development Bank Group (AfDB) financed workshop aimed at educating stakeholders about best practices for negotiating and drafting mining contracts. The AMDC workshop formed part of the Africa Mining Vision (AMV), an initiative adopted by governments in 2009 to ensure that natural resources form inclusive sustainable foundations for Africa’s socio-economic development.

The project comes at an opportune time, according to Malawi’s Minister of Natural Resources, Energy and Mining Bright Msaka, who said the country was undertaking reforms aimed at improving service delivery. He said for more than 100 years many African countries, Malawi included, had not gained maximum benefits from mining due to a number of reasons, including inadequacy in negotiating mining development agreements (MDAs).

He said MDAs were often highly complex and many governments were less informed about the technical details and geological endowments than the mining companies which came to negotiate, backed by qualified lawyers and technical experts. “It is our ambition to be a model country whose extractive industries optimally and equitably benefit citizens.”

Bright Msaka said with AMDC support and inspired by AMV, the Ministry and relevant stakeholders, were developing a Country Mining Vision (CMV) to complement other initiatives to ensure promotion of sustainable mineral development.

AfDB Group’s Resident Representative Andrew Mwaba said AfDB believed the extractive sector could help drive Africa’s economic transformation by providing much needed resources for inclusive, sustainable and diversified development. He said the AfDB was committed to working with countries to address some of the challenges, including policy weaknesses and unfair contracts, and to ensure countries derived maximum benefits from natural resources.

He said such initiatives were necessary because Africa’s natural resources had become valuable in global trade and the object of investor attention while sustainable mining investments were linked to economic growth, job creation and alleviation of poverty.

According to AfDB , Malawi’s natural resources could contribute over US$30 billion annually in government revenues over the next 20 years. It also estimates that revenues from oil, gas and resource discoveries could contribute between 9% and 31% of additional government revenue for the first 10 years of production.

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