Malawi has never had a mineral sites before Kayelekera Uranium plant in Karonga which was opened barely two years ago with loads of machine planting, sampling as well as lengthy geological surveys by an Australian investor Paladin.
The running court battles between some bludgeoning Civil Society Organizations and the State on the opening of the mine nearly scuttled the establishment at the very beginning.
The Civil Society groups wanted the mine to stop while government wanted investors to go ahead with extraction projects.
Malawi’s Gross Domestic Product (DGP) has been a stagnant sorry figure; significantly lower if scaled against neighbouring countries and consequently the country’s export volume hasn’t been newsworthy.
But after taking care of her natural beauty for four decades it just time, the country divorced her barrenness.
This was certified when the mine was established regardless of resistance from some difficult to impress civil groups.
Over the decades economic experts have blamed the country’s stagnant economic growth and dwarfed GDP to the absence of mines which could shoot export potential and consequently fire up GDP figures.
A recently commentary from economic expert indicates positive news on the future of Malawi GDP saying Keyerekera mine has great potential to overturn the ruin that is Malawi GDP figures into some competitive figures in the Southern Africa Development Community (SADC) region.
World Bank economist Thomas Chataghalala Munthali says Malawi’s GDP can shoot with about 10 percent.
He made the prediction in his Global Crunch analysis where he says the opening of Uranium mine in Karonga is set to complement Malawi’s main exports, which include tea, tobacco and sugar.
“Malawi’s main exports remain the traditional agricultural commodities of tobacco, tea and sugar – these form over 70% of total merchandise exports. Uranium maybe an important commodity beginning next year (hoped to raise GDP by around 10% over its mining life –2009-2019),” Munthali said in the write up.
However, Munthali said Malawi just like some other African countries were in unfortunate state following the declining terms of trade for mineral and agricultural commodities in the coming year.
“In 2009, world trade volume is expected to slip by 2.5% —the first such drop since 1982 —One of the primary drivers of this is the credit crunch. It's not just the lack of demand for the product, but there's a big gap in trade finance,” he said.
According to Munthali’s paper, Europe and South African markets take over 70 percent of Malawi’s exports. The USA and Europe alone have been taking around 11 and 60 percent respectively of Malawi’s total exports.
“Encouragingly, the European market is shrinking while the Sub-Saharan market is expanding. This implies any financial and recessionary effects in the main trading partners economies, is bound to affect the country’s BOP position. For example, the recent appreciation of the Kwacha against the Rand could hurt Malawi’s exports to RSA,” Munthali added.
Meanwhile, Malawi’s growth rate for 2009 was scaled down to 6.7 from 7.9 percent due to global increases in fuel and fertilizer prices, but higher than Sub-Sahara’s 4.5 down from earlier projection of 5.4 percent. Malawi has faced the worst fuel crises, which has been exacerbated by the lack of foreign currency in the country.
Malawi’s GDP is principally comprised of Services (44 percent, agriculture (32 percent), manufacturing (10 percent), and construction (5 percent).
The main drivers of the circa 8 percent GDP growth rates observed in the period 2006-08 have been tobacco, tea, sugar, manufacturing, telecommunication, and financial services.
In the ended year Malawi did not fair well on tobacco chiefly due to world economic problems as most traditional buyers were not able to fully participate in the tobacco market.
Uranium is as sensitive as it is valuable. Grain Malunga Natural Resources Minister has revealed that Malawi is thinking of embarking on uranium enrichment, an infamous world phenomenon which has ignited squabbles among world’s super powers.
“Plans are at concept stage, we are thinking of enriching Uranium with a certain percentage to generate electricity, we Malawi is lucky to have huge uranium deposits,” he said.
Malawians have been curious to get to know the volume of uranium deposits and the amount of money the country can harvest periodically from the wealthy mineral.
However Malunga said government is deliberately hoarding such information to avoid attracting malicious global espionage.
On the economic performance reports suggested that Malawi had the highest growth rate in Africa coming second to Qatar on the world stage. However this rating has had problems to be trusted.
This is because most credible international news sources continue saying Angola was the highest growing economy in Africa.
Recent Reuters report said Angola is the Africa’s fastest growing economy because of its oil. Angola is Africa’s largest oil producer followed by Nigeria and Libya in the same order.