Malawi is losing more than K1.2 trillion every year because gold is being smuggled out of the country instead of being sold through official channels, a new study has revealed. This means Malawi is losing aboutUS$700 million annually, money that could be used to buy fuel, medicines, fertiliser and to support development projects. The study was done by the Malawi Mining Investment Company (Mamico) and found that the amount of money lost through gold smuggling ismore than double what Malawi earns from tobacco, which is the country’s biggest source of foreign exchange.
Mamico discovered that there are81 illegal gold mining sites across the country, where gold is being mined and sold secretly. Most of the gold is bought byforeign traders, who then smuggle it out to other countries where they sell it at higher prices. Because of this, the Reserve Bank of Malawi has managed to buy only540 kilogrammes of gold since 2023, worth aboutK123 billion.
Experts say this is very small compared to how much gold is actually being produced in the country. Mamico chief executive officer Leonard Kalindekafe said gold has the potential to help Malawi solve its serious foreign exchange problems, but the country is failing to benefit because most of it is being stolen through smuggling. He said Mamico plans to start buying gold directly from local miners so that Malawians can sell their gold legally and the country can keep the money.
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Experts say the problem is getting worse because more foreign traders are entering the informal gold market. Geoscience expert Ignatius Kamwanje said most gold mining in Malawi is small-scale and informal, which makes it easy for foreign buyers to exploit local miners and smuggle the gold out. Geologist Paul Mvula said Malawi could be earning much more if illegal mining was controlled.
“540 kilogrammes is good, but we could have bought far more if illegal mining was stopped,” he said. Mining and Minerals Regulatory Authority director general Samuel Sakhuta admitted that stopping illegal mining is difficult because many miners refuse to get licences and powerful people hide behind the small miners. He said government is trying to bring miners into the formal system so that gold can be tracked and the country can benefit. If the K1.2 trillion being lost every year was kept in Malawi, it would be enough to:
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