The Ministry of Natural Resources, Energy and Mining has said lack of skills to negotiate mining development agreements is affecting the growth of the sector, resulting in Malawi losing the much-needed revenue.
The ministry’s Principal Secretary Patrick Matanda said this on Monday in Lilongwe during the opening of a workshop on best practices for negotiating and drafting mining contracts.
He said one of the reasons many African countries, including Malawi, have not achieved tangible benefits from mineral resources is of poor negotiating skills, resulting in poor contracts being signed.
The meeting comes at a time the civil society and some Malawians have been urging government to give mining contracts to investors that are transparent and benefit the country.
Most African countries including Malawi are turning to mining as they look for more ways of generating revenue to support their projects as donor fatique is becoming more prevalent.
Said Matanda: “After more than a century of mining, many African countries have not derived maximum benefits from mining in terms of soliciting tangible sustainable development outcomes, including improved livelihoods of people across the continent.”
He said while the causes for lack of tangible benefits from mineral resources seem to be several and complex, it is widely recognised that one major issue is capacity inadequacy in negotiating mining development agreements [MDAs] by African countries, including Malawi.
“MDAs are often highly complex and many African governments are less informed about the technical details and geological endowments than the mining companies, which come to negotiate, backed by highly qualified international lawyers and reputable technical experts,” said Matanda.
African Development Bank (AfDB) was one of the organisers of the meeting and its country representative Andrew Mwaba said their estimates show that the mining sector, if properly handled, can contribute over $30 billion annually in government revenues in Africa over the next 20 years.
“The AfDB believes essentially that the extractive sector can help drive the continent’s economic transformation by providing much-needed resources for inclusive, sustainable and diversified development,” he said.
African Minerals Development Centre director Kojo Busia said illicit financial flows are robbing Africa of its mineral resources.