Malawi’s efforts to expand the mining sector could remain limited unless government, financial institutions and mining players work together to address financing challenges facing the industry.
The call was made during a breakfast engagement in Lilongwe earlier this week, which brought together mining experts, government officials and other stakeholders to discuss financing opportunities and challenges under the theme, “Winning Through Collaborative Efforts: Partnerships in Practice”.
Speaking during the engagement organised by National Bank of Malawi (NBM) plc, the bank’s Head of Retail Banking, William Chatsala, said NBM has the capacity to finance both small and large-scale mining operations, but stronger engagement is needed to manage the risks associated with lending to the sector.
“Mining presents a huge potential for the development of this country. We look at lending towards the mining sector in most cases as risky, especially for exploration purposes. However, if we do not talk between the banks and the potential miners, we do not have an opportunity for enabling mining to take off,” said Chatsala.
He said the bank can support mining operations through direct financing and partnerships with other players.
Ministry of Industrialisation, Business, Trade and Tourism Deputy Director Chezani Otaniele commended the engagement, saying it demonstrated the willingness of the private sector and government to work together in developing the mining industry.
“The main take out of this event is the financing part and the collaboration. It has shown that the financial sector is ready to support government’s effort,” said Otaniele.
Otaniele said Malawi could achieve its target of increasing mining’s contribution to the economy to 10 percent by 2030 if government, the private sector and financial institutions work together.
“We are moving towards that 10 percent if we do collaborate and work together, both the government and the private sector, and the financial institutions need to come in so that they finance the whole operation,” he said.
Mining and energy expert Grain Malunga also called for stronger partnerships, saying misinformation and poor decision-making were among factors slowing investment in the sector.
“The problem is we have so many influencers who misinform the nation and our political leaders to make certain decisions that are not good for mining investment. These are the issues that are obstructing progress in the mining sector,” said Malunga.
The engagement comes after NBM plc disclosed during its 54th Annual General Meeting that it plans to invest in the mining sector.
