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As Malawi grapples with economic instability, food insecurity, and rising debt, the government is turning to its untapped mineral wealth to chart a path towards recovery.
A new World Bank report, the Malawi Economic Monitor (MEM), highlights the country’s mining sector as a potential game-changer for economic growth, foreign investment, and job creation.
Malawi’s economic recovery remains fragile, with GDP growth projected at just 1.8% in 2024, failing to keep pace with the 2.6% population growth rate.
This marks the third consecutive year of declining per capita income, driven by a severe drought, a struggling agricultural sector, and persistent foreign exchange shortages.
The report warns that food insecurity has reached record levels, with 5.7 million Malawians (28% of the population) facing crisis-level hunger due to weak harvests and rising inflation. The country also continues to battle a widening fiscal deficit, high public debt, and a fragile foreign exchange market, further dampening economic prospects.
Malawi is endowed with critical energy-transition minerals (ETMs), including graphite, titanium, uranium, and rare earth elements, which are in high demand globally for renewable energy technologies.
In a bid to attract foreign investment, the government has recently signed Mining Development Agreements (MDAs) with key players:
Mkango Resources for the Songwe Hill rare earths project
Lotus Resources for the Kayelekera uranium mine restart
Globe Metal & Mining for the Kanyika niobium project
“These mining projects have the potential to boost exports, create jobs, and provide much-needed foreign exchange,” said Finance Minister Simplex Chithyola.
“But to unlock this potential, we must address governance issues, infrastructure gaps, and regulatory inefficiencies.”
The MEM report outlines key challenges hindering Malawi’s mining sector, including lengthy permit approvals, weak governance, and inadequate energy and transport infrastructure. Investors have also raised concerns over unclear mining policies and unpredictable regulatory changes.
To fully harness mining’s benefits, the government is focusing on a ‘Grow, Protect, and Benefit’ approach, which includes:
Fast-tracking investment approvals and ensuring a transparent regulatory framework.
Strengthening environmental protections and improving local workforce training.
Establishing a robust revenue management system to ensure mining profits benefit the broader economy.
One of the key concerns for mining investors is Malawi’s unreliable electricity supply. The government is banking on the Mpatamanga Hydropower Storage Project (MHSP), a 350MW facility that aims to improve electricity access, support mining operations, and reduce the country’s dependence on expensive energy imports.
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“Energy security is crucial if we are to see meaningful growth in mining,” said Tsolmon Adiya, Senior Mining Specialist at the World Bank. “With the right policies in place, Malawi can position itself as a major player in the global clean energy supply chain.”
Despite its vast potential, experts caution that Malawi must act swiftly and decisively to create a stable business environment for mining companies. Without regulatory certainty and infrastructure improvements, the country risks losing out on valuable investments.
As the government pushes for economic diversification, mining could emerge as a lifeline for Malawi’s struggling economy. However, the success of this sector will depend on bold policy reforms, transparent governance, and sustainable practices to ensure that the benefits reach all Malawians, not just a privileged few.
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