Kayelekera Deal: A 15% Stake Is Not the Problem, It’s the Lack of Malawian Ownership
The debate surrounding the mining deal between the Malawi Government and Lotus Mineral Services, particularly concerning the Kayelekera uranium mine, has sparked significant discussion in the public sphere. Many have criticized the deal as a “raw deal” for Malawi, pointing to the fact that the government holds a mere 15 percent stake while Lotus controls 85 percent. However, I believe this perspective misses the mark, and the real issue lies elsewhere.
First, it’s important to understand that this deal is often referred to as a “free stake.” This means that Malawi is receiving 15 percent of the profits from the mining venture without contributing a single kwacha to the actual extraction process, which is a billion-dollar operation. To put it simply, Malawi is gaining a portion of the profits without any financial investment, making this arrangement far from a “raw deal.”
While the deal itself may seem unbalanced at first glance, the true concern is not the share distribution, but what happens to the 15 percent stake that the government receives. This money is deposited into “Account Number 1,” a vague reference to government funds, but unfortunately, we don’t know exactly how it’s being used. Given the history of corruption and mismanagement in the country, there is a valid concern that these funds could be misused for political campaigns or personal enrichment by those in power. This is where the real danger lies—not in the deal itself, but in the lack of accountability and transparency in how the funds are handled.
So, what should be done? Rather than focusing on the fact that the government only holds 15 percent, we should be pushing for policies that allow more Malawians to benefit directly from the wealth generated by our natural resources. For example, why should Lotus take 85 percent of the stake in Kayelekera? Why not adjust the deal so that Lotus holds 40 percent, the government keeps 10 percent, and the remaining 50 percent is given to Malawians? This would allow ordinary citizens, especially entrepreneurs, to have a direct stake in the mining industry, ensuring that more wealth stays in the country and contributes to our economic development.
There are many successful Malawian entrepreneurs—such as Thom Mpinganjira, Shepherd Bushiri, Korea Mpatsa, and Napoleone Zombe—who have the financial capacity and business acumen to invest in such ventures. If given the opportunity, these individuals could help create jobs and stimulate economic growth by owning a share in Kayelekera. This would not only empower local businesses but also keep a significant portion of the profits within Malawi, where it could be reinvested to uplift the population.
Ultimately, the issue is not about the government’s 15 percent stake; it’s about the lack of a legal framework that allows ordinary Malawians to have a real share in the nation’s resources. The government should be pressured to enact legislation that facilitates broader Malawian ownership of mining ventures, ensuring that the wealth generated from our natural resources benefits the many, not just a few.
In conclusion, the Kayelekera mining deal should not be seen as a “raw deal” but as an opportunity to rethink how we manage and distribute the wealth derived from our national resources. Let’s focus on advocating for legislation that ensures Malawians, not just foreign companies, can have a stake in the future of our economy.
About the author:
Charles Ngwenya, Final-Year Economics Student at Chancellor College
