Lawmakers warned against scaring investors away

Lawmakers have been cautioned against actions that could send negative signals to investors as debate continues over how Malawi should manage its growing mining sector.

Minister of Justice Charles Mhango said Parliament must strike a balance between protecting citizens’ interests and safeguarding investor rights, warning that undermining confidence could affect the country’s mining ambitions.

Mhango made the remarks in Parliament on Friday while responding to concerns raised by Rumphi West legislator Yona Mkandawire over the Kangankunde rare earths project involving Malawi-registered Rift Valley Resource Developments and Australia-listed Lindian Resources.

Mkandawire questioned whether the presidential directive banning the export of raw minerals still applied to Kangankunde, after noting that there appeared to be conflicting letters, one restricting exports and another allowing the company to export.

The legislator also questioned whether Malawi was benefiting from the project’s proceeds, considering that Rift Valley is registered in Malawi while Lindian Resources is listed on the Australian Stock Exchange, asking government to explain the implications of the ownership arrangement.

In response, Mhango said all decisions made by Parliament and government must be guided by the Constitution and Malawi’s laws, warning against actions that could expose the country to legal disputes.

“Whatever we discuss here, whatever decisions we make here, must be guided by the laws of Malawi,” Mhango said.

He cautioned against calls to suspend investment activities without a legal basis, saying government could face costly legal consequences if it failed to respect agreements entered into with investors.

Mhango assured Parliament that there was no danger in the arrangement between Rift Valley and Lindian, saying the transfer of shares and licences was being handled through the required processes.

He said Malawi must provide a conducive investment environment, arguing that the country cannot attract foreign direct investment if investors fear that their rights and agreements will not be respected.

“We are not here to scare investors. We are here to provide a conducive legal environment for investment,” Mhango said.

After the debate, Mhango told journalists that his intervention was aimed at emphasising government’s position on mining investment and reassuring investors that Malawi remains open for business.

He said the country’s poor performance in past ease-of-doing-business rankings affected its image as an investment destination, adding that government was working to restore investor confidence.

Mhango said mining has been identified as a key sector for economic recovery and that Malawi must carefully manage its mineral resources while ensuring citizens benefit from the country’s wealth.

However, Speaker of Parliament challenged Mhango’s remarks, saying they appeared to dilute Parliament’s constitutional oversight powers.

The Speaker reminded the minister that Section 60(6)(d) and (f) of the Constitution gives Parliament powers to exercise oversight over government, including monitoring the exercise of powers and functions of the Executive.

“Our job is just to provide oversight. It is also in the Constitution, and we will not relent. We will provide oversight through our committees,” the Speaker said.

The exchange highlighted the delicate balance between Parliament’s constitutional oversight role, protection of national interests and government’s efforts to maintain investor confidence in Malawi’s mining sector.