The country’s mining revenues for all current and prospective mines if developed, are projected to reach US$ 200 – 500 million by the early 2030s.
This is contained in a new report, the Malawi Public Finance Review published by the World Bank – under the title ‘Restoring Stability, Rebuilding Trust’
According to the report, if well managed, mining could stimulate growth and help address the country’s fiscal and external imbalances.
The development could provide a moderate boost to Malawi’s public finances, depending on project completion and fiscal terms.
With the Kayelekera uranium project restarting operations in 2025, it will likely take five to ten years for Malawi to realize substantial fiscal benefits from mining with economic outcomes varying significantly between a business-as-usual scenario and an “unconstrained” scenario.
Under the former, exports from low- and medium-risk projects would rise gradually from 2026, reaching about US$ 1 billion annually by the early 2030s.
In the unconstrained scenario, exports could more than double, exceeding US$ 2 billion.
However, most export earnings will cover capital and operating costs, with a large share remitted to foreign investors.
These projections however assume no further delays beyond the current exploration, engineering, and construction phases.
“Government revenues could exceed US$ 500 million during the 2030s if high-risk projects materialize, but are likely to be much lower. Under the business-as-usual scenario – limited to three low- and medium-risk projects (Kayelekera uranium,
Kasiya rutile, and Kangankunde rare earths) – annual revenues could surpass US$ 200 million by the early 2030s, equivalent to about 10 percent of current total revenues (2024/25) or roughly 2 percent of GDP.
“The unconstrained scenario adds high-risk projects (Makanjira heavy sands, Kanyika niobium, Songwe Hill rare earths, and Malingunde graphite), boosting revenue potential to over US$ 500 million.” Reads the report.
It further noted that most revenues would come from corporate income tax (CIT), with smaller shares from royalties and minimal dividends from government profit participation. These export and revenue forecasts – based on feasibility studies and the best available information – carry significant uncertainty.
However, the publication indicated that revenues are likely to fall short due to weaknesses in the fiscal framework and mining development agreement terms, limited administrative capacity, profit-shifting risks, and the possibility that some projects may not materialize.
It stated that Malawi’s statutory fiscal regime provides a solid base for mining agreements but contains important gaps noting that he fiscal regime is designed and implemented through general legislation and project-specific contracts.
The report highlighted that the sector is governed by a ring-fenced tax regime with corporate income tax at 30 percent, royalties between 5 -10 percent, and a 15 percent resource rent tax, alongside a 10-year stability period for fiscal certainty.
According to the Bretton woods institute report, optimizing tax collection from Malawi’s growing mining sector faces significant challenges due to base erosion and profit shifting (BEPS) risks.
It added that weak and unclear provisions on permanent establishment, thin-capitalization rules, and low withholding tax rates- further reduced by tax treaties – create loopholes that multinationals can exploit.
To improve predictability and revenue sustainability, the publication recommended that Malawi should define equity stakes in law, consider sliding-scale royalties for transparency and progressivity, and simplify or redesign the resource-rent tax to reduce loopholes and capture windfall gains.
It challenged authorities on the need to enhance efficiency and transparency for the government to maximize the benefits of Malawi’s mineral wealth.
“Malawi should improve revenue generation, efficiency, and transparency in its mining sector by introducing clear timelines for licensing, enacting a progressive fiscal regime with model contracts, and revising royalty structures to reflect market prices.
“The government needs to define its equity stake, streamline the resource-rent tax for larger projects, and strengthen tax treaties to retain revenue while attracting investment. Transparency measures — such as full disclosure of contracts and capacitating the EITI Secretariat — are critical, alongside efforts to build public understanding and trust through consistent engagement with communities and stakeholders”.