Malawi has just frozen the exports of precious minerals and gemstones as it reviews the extractive sector.
The southeast African country has also decided not to issue new licenses and permits to companies the government in Lilongwe claims.
Reports from Malawi say this will help to sanitize the mining sector and to boost the country’s economic standing.
Malawi has significant deposits of minerals, including Ruby, Sapphire, Titanium, Graphite, Bauxite, Coal and other rare earth minerals.
However, unlike its neighbors. The nation is yet to maximize the full potential of its mineral deposits.
According to the World Bank, if Malawi capitalizes on the growing demand for green minerals such as graphite and titanium, the country’s mining sector could generate up to USD 30 billion in exports between 2026 and 2040.
That could help the country uplift its population out of poverty.
To address that, Malawi has thus banned the exports of gemstones and precious minerals.
Lilongwe also stopped issuing new mineral, export licenses and permits to companies.
This is supposed to pave the way for enhancing Malawi’s regulatory framework and boost the country’s economic growth.
Malawi’s Minister of Mining and Minerals, Joseph Mkandawire has said that it had imposed a restriction on the export of all the minerals with the mediate effect.
The mining minister noted that the ban had been imposed to allow the country to sanitize the mining sector.
Mkandawire further said that the ministry would be undertaking reforms to bring in more efficiency and transparency in the mineral rights Administration and added that the reforms would be carried out within a period of 21 days.
The move came after the country’s vice president Michael Usi, reportedly ordered a review, all the existing contracts.
This followed Revelations that precious gemstones were reportedly being exported at undervalued prices and was costing the government millions in Lost Revenue.
Malawi’s minerals industry has reportedly contributed only 3.5 percent to the national income in 2023. Violet accounts for only about one percent of the country’s GDP.
Instead, the Southern African country has relied mainly on agriculture with tobacco being its biggest source of foreign exchange.
As it happens, in recent years, the landlocked Malawi has sought billions of dollars in unpaid taxes in royalties from foreign companies.
Since mid-2022, the country demanded over 309 billion dollars from Columbia gem House, a gemstone company based in the United States.
This was for the compensation of the Rubys exported from Malawi over the past decade.
The International Monetary Fund (IMF) has said that the amount claimed from the United States’ mining firm is nearly 30 times the Gross Domestic Product of the debt-leading countries.
Yet despite the government trying to crack down on the foreign companies, nearly three quarters of the 24 million population of the country continues to live in extreme poverty.
They continue to suffer from high inflation, food insecurity and climate change with no sight of their Wars coming to an end.