Malawi has banned the export of gemstones and minerals to reform its mining sector. This decision follows an order to review existing contracts amid demands for billions owed from foreign companies. The mining industry, despite its potential, contributed only 3.5 percent to national income in 2023, while poverty remains prevalent among the population.
The government of Malawi has imposed an immediate ban on the export of gemstones and precious minerals, halting the issuance of new export licenses. This decision aims to reform the administration of the mining sector and establish greater transparency and efficiency in mineral rights management. Mining Minister Joseph Mkandawire announced this measure via social media, emphasizing the need to sanitize the sector.
This export ban will remain in effect indefinitely while the government reviews all existing contracts, a process that has been allotted 21 days. The vice president of Malawi initiated this review to address overdue taxes and royalties owed by foreign companies, which amount to billions of dollars. Recently, Malawi has sought over $309 billion from Columbia Gem House for unpaid taxes on ruby exports spanning the last decade.
Allegations have emerged that the company’s local subsidiary, Nyala Mines Limited, declared only $600 in taxes against expected revenues of $24 billion from its operations in Malawi. This claim represents nearly 30 times the country’s GDP, as per the International Monetary Fund. Despite promising mineral resources, Malawi’s mining industry contributed a mere 3.5 percent to the national income in 2023, as reported by the World Bank.
The potential of this sector is substantial; it could generate up to $30 billion in exports from 2026 to 2040 by capitalizing on the rising demand for sustainable minerals such as graphite and titanium, the World Bank asserted. Notably, a significant proportion of Malawi’s population lives in extreme poverty, with nearly 75 percent of the 24 million citizens affected.
In conclusion, Malawi’s government has enacted a ban on the export of minerals to reform the mining sector and enhance contract transparency. While this move aims to rectify past financial discrepancies with foreign companies, it also highlights the untapped potential of the nation’s mineral resources. With a focus on future opportunities, Malawi seeks to leverage its mineral wealth to improve its economic situation amidst high poverty levels.
Original Source: clubofmozambique.com
