Activist for local participation in extractive sectors

Malawi’s laws should clearly stipulate how the country engages with investors in the extractive industry—minerals, oil and gas—by providing for local participation and to avoid suspicion of corruption.

Speaking in a telephone interview on Sunday, in relation to the review of the Minerals and Mines Act 1981, the Institute for Policy Interaction (IPI) executive director Rafik Hajat said agreements in the extractive industry must be standard to benefit locals and avoid suspicion.

Hajat pointed out that laws must ensure that companies that invest in the extractive sector must also provide for local participation as the case has been in other countries including Tanzania and Zimbabwe.

“A template should be appended to the Act that provides on the requirements that the investor should meet. This will remove suspicions of corruption having taken place,” said Hajat.

He further called for the renegotiations of previous contracts.

Analysts and activists have been crying foul over some of the contracts that the country negotiated including Kayerekera’s Paladin Africa Limited agreement in which government has 15 percent stakes—which is far below what other companies offer in the region.

Hajat noted that to ensure that locals participate in the extractive industry the investors must be required by statute to list on the Malawi Stock Exchange (MSE) and offer a certain amount of shares to the public within a particular time.

He added that to ensure that the public has access to the shares the government should provide a loan scheme to those that

He, however, noted that care should be taken to ensure that not only politicians benefit from the scheme.

The World Bank and the European Union are providing support to the development of the mining sector through the Mining Governance and Growth Support Project (MGGSP).

The project is meant to help improve efficiency, transparency and sustainability of mining sector management.

Minister of Natural Resources, Energy and Mining Atupele Muluzi was quoted in The Weekend Nation last week having said that in order for mining to make tangible economic contribution to the country’s economic growth, there is need for concerted efforts, consistent and spirited efforts towards promotion of sustainable mining.

Last year, Malawi launched the Mines and Minerals Policy which seeks to improve on local participation in the sector.