Covid-19 hits extractive industry hard

The year 2020 has been a very challenging one for the extractive industry, a report by a financial consultancy firm, EMJ Advisory Firm says.

EMJ Advisory Director Manuel Chisale told journalists at Mponela in Dowa on Thursday that the Covid-19 pandemic hit the industry hard as the disease took an unprecedented humanitarian and economic toll on the industry.

Chisale–The pandemic caused severe disruptions to the country’s economy leading to underperformance for businesses–Photo by Alfred Chauwa, Nyasa Times

Chisale said the pandemic caused severe disruptions to the country’s economy leading to underperformance for businesses in all sectors including manufacturing, transport, retail and wholesale among others.

He said, in particular, spill overs from the global recession and border closures in neighbouring countries have reduced exports and imports of raw materials; raised transit costs and reduced foreign direct investment.

Chisale added that similar to other sectors of the Malawi economy, the Covid-19 pandemic has also affected the extractive industry.

“The August 2020 analysis of the impact of Covid-19 pandemic on all sectors of the Malawi economy indicates an under collection of tax revenues amounting to MWK54.5 billion,” he said.

The EMJ report recommends a holistic turnaround to the way of doing business in the sector.

Hence, Chisale emphasized that the National Secretariat should develop a remedial action plan to facilitate follow-up and implementation of all Malawi Extractive Industry Transparency Initiative (MWEITI) reports recommendations in order to increase the income.

He said the Ministry of Finance and the Reserve Bank of Malawi should expedite establishment and operationalisation of a regulatory and fiscal framework to govern the operations of the Artisanal and Small-Scale Mining (ASM) sector.

The Extractive Industries Transparency Initiative (EITI) is a global coalition of the government entities, extractive companies and civil society organisations working together to improve openness and accountable management of revenues from natural resources.

EITI promotes better governance in countries rich in oil, gas and mineral resources, and seeks to reduce the risk of diversion or misappropriation of funds generated by the development of a country’s extractive industries.

Malawi has various places where minerals are being extracted and some of these places with mineral deposits include, phosphates at Tundulu in Phalombe, bauxite and rare earths on Mulanje Mountain, kaolinitic clays at Linthipe and Senzani in Dedza and Ntcheu respectively, coal in Rumphi, Chitipa, Karonga, Nsanje and Chikwawa, Kyanite in Ntcheu, limestones in several districts in the country, rare rare earths in Balaka and Phalombe.

Other sector places include Graphite in Salima and Lilongwe, Sulphides in Lilongwe and Dowa, Iron ore in Blantyre, and titanium minerals along the Lakeshore in Salima and Nsanje; and Vermiculite in Mwanza.

Follow and Subscribe Nyasa TV :

Sharing is caring!

Follow us in Twitter
shares
Read previous post:
60% of Golden Peacock Hotel business benefiting from Bushiri’s ECG visitors

Prophet Shepherd Bushiri's mysterious return to his native home in November last year could be a forgotten tale to many...

Close