LILONGWE-(MaraviPost)- The countrys civil society organizations in the extractives sector are fiercely pressing for the Malawi government to establish a separate financial account on all of the country’s mineral proceeds.
This will allow communities where mineral are extracted to ensure its resources flow into a separate fund where the communities will benefit from this fund account. This is unlike the current scenario, where the earnings are deposited into account Number One Treasury account.
The call comes amid general public concerns over the Government’s lack of transparency and accountability on how extractives profits are being used, and leaves communities where minerals are extracted, to be ravaged in continuing abject poverty.
This is the reason Malawi Government, through the Ministry of Finance’s Malawi Extractive Industries Transparency Initiative (MWEITI), a Multi-Stakeholder Group (MSG) composed of government institutions, civil society organizations, and private sector institutions, is championing disclosure of minerals benefits.
Through the World Bank-funded Growth and Governance Support Project, the Government hired US-based consultants, Gary McMahon and Sridar Kannan, to assist in designing policy options and institutional arrangements, both for mineral revenue management and resource allocation.
This will include, but not limited to, the distribution of revenue between central government and local mining communities; current and future generations; recurrent and development (infrastructure, health and education) budgetary allocations; and fiscal policy approaches such as the fiscal sustainability framework and permanent income hypothesis.
The consultants are currently in the country from April 18 to 28, 2017, for a consultation mission with government ministries and departments, Malawi Revenue Authority (MRA), mining companies, the civil society and media, on extractive industries best practices that serve local communities.
On Friday, some civil society organizations (CSOs), pressed government through the consultants, to introduce an independent bank account for minerals profits.
They argued that with the separate account, CSOs will be able track down income from the extractive industries for meaningful development in the communities where extractive resources are generated.
The CSOs added that once the account is opened, local communities where mineral deposits are extracted, will directly benefit for their developmental projects.
“We have had a bad experience with Kayerekera mining in Karonga, where communities got a raw deal. While we appreciate government efforts to consult the general public on how best should minerals laws deal with the sector, we want a separate bank account of these proceeds, for easy tracking,” urges Kossam Munthali, Natural Resources Justice Network (NRJN) Chairperson.
Echoing on the same, Elyvin Chawinga of Oxfam Malawi, said that the special bank account will give communities to benefit directly from mineral earnings.
Gary McMahon, the international consultant, told The Maravi Post that Malawi was making head-way in establishing the legal framework to guide the extractive industry.
McMahon observed that the nation is doing better in extractive sector, wherein half of the proceeds go communities for their development with little going to central government.
In his remarks, George Harawa, MWEUTI coordinator, assured all stakeholders and communities his department will consider their inputs into the final extractive industries legal framework that is to guide the nation.
Harawa disclosed that the Malawi’s first-ever Extractive Industry Transparency Initiative (EITI) report, is expected to be ready soon; it aims to attaining world-compliant status. This is the worldwide standard network on extractive industry that focus on the management of mining, oil, forestry, and gases.
The report will disclose information on tax payments, licences, contracts, and production, among other key elements around resource extraction.
In the study, natural resources companies are expected, and required to disclose the payments they make to the government, including taxes, royalties and rents.
In December 2016, Malawi’s extractive industries stakeholders adopted two critical documents: open data policy, and benefit ownership disclosure roadmap.
The policy was developed to ensure that data relating to natural resources revenue and expenditure, is easily accessible, user-friendly, understood, and raises public debate regarding the management of the extractive industry, mining, oil, forestry, and gases.
The approval of these documents, is Malawi’s commitment towards the worldwide standard network, the EITI. The expectation is to maximize benefits from extractive sector proceeds and increase social-economic growth of the people.
Following the country’s commitment and compliance with the EITI standards, the Ministry of Finance, was indorsed to champion the initiative in Malawi, leading to the establishment of MWEITI.
Since its inception, the MSG has developed a roadmap and made an application to EITI International Secretariat for Malawis candidature status, which was granted on October 2015.