Saturday, December 27, 2014

Mining in Malawi: Curse or Blessing?

...Turning mining from curse to development tool

To take stock, or not take stock at all? That is the question.

And Paramount Chief Kyungu often opts not to count the awards community members have received as a token of appreciation from miners there.

“I strongly feel that thee is more that mining companies can do to neighbouring communities than is currently the case. Things like promoting quality education and access to good health,” says Kyungu.

This disappointment means he fights the nudge to count the benefits,  afraid that, if he does (count), he may not be able to psych himself into the anxiety that will fall over him.

And Kyungu is not the only one affected. His subjects have often teamed up with civil society organisations to call for more benefits from mining activities taking place in Karonga, arguing that good corporate citizenship cannot be limited to the construction of a health centre.

“Of course, we know that mining companies are not the government but, at least, they should go beyond employing people from neighbouring villages, constructing tarred roads or health centres; I know of countries where community members around mines get scholarships and other things,” says Michael Nseteka, a Karonga-based businessman.

Doing more
As if buying into the community members’ line of thinking, a coalition of civil society organisations in the Southern African Development Community (Sadc) has ganged up against mining companies in a bid to end what it calls “inequalities” between worth accumulated by the companies and the poverty prevalent in areas surrounding mines.

The coalition, trading under the banner The Sadc Basic Income Grant Coalition (Sadc Big), argues that Sadc countries including Malawi can afford to give their citizens a monthly financial package and calls for the institution of a cash transfer system based on universal coverage.

It says the Malawi Government can afford to give every citizen US$15 (K6, 255) monthly, but points out that “inconsiderate”  decisions to give incentives to mining.

“The Sadc Big campaign believes that due to desired secondary multiplier potentials, the amount of the Basic Income Grant is important and should be no less than US$15 (K6,255) per person per month. The delivery mechanism would go through public institutions, supporting financial inclusion,” reads part of the document.

Apart from imploring governments to provide funds to individual citizens, the coalition is also fighting for the establishment of a Sadc-wide Basic Income Grant in a move it says is aimed at reducing “severe destitution”.

It says a Basic Income Grant would help restore human dignity, decrease poverty and reduce inequality, and urges leaders not to politicize the initiative.

At a meeting held in South Africa on November 19, and attended by 19 organisations working in the Sadc region, civil society leaders said governments should hasten the process to stem wide-spread poverty in the region.

Malawi was represented by The Africa Network for the Prevention and Protection against Child Abuse and Neglect (Anppcan-Malawi) and the Centre for Social Concern. Other organisations included the Southern African Trade Union and Coordination Council, Studies in Poverty and Inequality Institute, World Vision South Africa , Mozambique Platform for Social Protection,
Southern Africa Green Revolutionary Council, Lesotho Platform for Social Protection, Consortium for Refugees and Migrants in South Africa, LifeLine Southern Africa, among others.

Anppcan-Malawi Chapter country director, Kenwilliams Mhango, said the coalition was of the consensus that the Malawi Government could afford to give its citizens US$15 (K6, 255) a month, citing the proliferation of mining companies in the country.

“It was discussed at the Johannesburg meeting in November that Malawi has been losing out in terms of financial resources from the mining sector. One of the reasons was that the Government of Malawi grants so many concessions and people’s economic well-being suffers,” says Mhango said, adding:

“We conducted a survey in three districts in the Northern Region, and discovered that there are over 45 mining companies that operate there. The national cake is, surely, not being shared equally. With the sharp, worsening and disproportional distribution of the national cake come problems such as unemployment, very low income, corruption, collapse of confidence in the political system and the economy at large.”

Mhango says Malawi can learn from countries that have social protection programmes and save its citizens from severe poverty. Some African countries already implement social protection programmes.

For example, Botswana runs a universal old-age pension, Lesotho implements a non-contributory old-age scheme, Liberia offers old-age assistance, Mauritius has a universal old-age pension, Namibia has old-age pension, South Africa has old-age pension child support grant and child support grant, care dependency grant and disability grant.

The other countries include Mozambique, which has a minimum income for school attendance, among others.

Creating a win-win situation
Mining Minister John Bande says Malawi was on a learning curve, and has since learned from experience and would ensure mining agreements signed with foreign and local prospectus create a win-win situation in a bid to increase the sector’s contribution towards economic development.
Responding to a questionnaire on why the government is taking time to finalise discussions with Globe Metals of Australia, (former) Mining Minister John Bande says discussions between the government and the investor were at an advanced stage.
“We want to safeguard the interest of Malawians now by making sure that agreements we make create a win-win situation,” says Bande, adding:
“The mineral resources belong to Malawians and we, the Joyce Banda administration, are just custodians with a responsibility to ensure that Malawians understand and benefit from mining deals.”
Bande says, in a bid to ensure that Malawians benefit from the mineral resources, the government had instituted a nationwide geo-physical exploration exercise, with such companies as Nu-energy had already joined government by starting airborne geophysical exploration in selected areas of the Southern Region. 
The Geo-physical Mapping exercise is a World Bank-supported initiative, and is part of the  Mining Governance and Growth Support Project.

He says the government is in a drive to generate more income through mining, adding that efforts are being made to create an enabling environment. He cites the launch of the Mines and Minerals Policy in April last year, and review of the Mines and Minerals.

“We realise that, in the past, about 30 percent of our income used to come from precious stones but, somehow, the dynamics changed somewhere along the way. However, we have seen that the mining sector is now contributing 10 percent to the national economy, up from 3 percent before Paladin Africa Limited started uranium mining operations at Kayerekera in Karonga district,” says Bande.

Information sourced from the World Bank website indicates that bank’s Board of Directors approved a $25million (K10.450, 000, 000) credit to support the Malawi Government improve management and governance of its nascent mining sector on March 31, 2011.

“In the next few years, minerals would become one of Malawi’s main sources of foreign direct investment and generate up to 25 percent of export earnings, hence the need for efficiency and transparency in this sector,”  the website quotes Sandra Bloemenkamp, World Bank Country Manager for Malawi, as saying.

In her ‘State of the Nation’ address,  President Joyce Banda indicated that the mining sector continued to grow steadily and its contribution to the GDP grew from 3 percent in 2009 to 10 percent in 2012, resulting in a substantial increase in exports.

She also said the government had launched an airborne geophysical mineral exploration programme to be carried out by Nu-energy Gas of Australia in the districts of Chikhwawa and Nsanje.

"Government will continue to implement the Mining Growth and Governance Support Project with financial support from the World Bank and European Union; introduce training courses in mining in our institutions of higher learning,” says Banda her address.
What is clear, though, is that, as the sector grows, so will the community frustrations.

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