The Revenue Costs and Benefits of Foreign Direct Investment in the Extractive Industry in Malawi: The Case of Kayelekera Uranium Mine

"Natural resources have the potential to transform national economies in developing countries towards pro-poor and sustainable development if properly managed. In the absence of sound policies and procedures governing natural resources, mineral resources can be a source of economic instability, social conflict, and lasting environmental damage. Failure by African governments to harness revenue from natural resources for development is twofold; i.e. poor mining and investment policies and machinations of the investors which make use of complex systems to evade and avoid taxes. The report looks at the cost and benefits of Foreign Direct Investment in the extractive industry with a particular focus on the Kayelekera Uranium Mine in Malawi. Kayelekera was chosen on the basis that it is the largest MNC in Malawi’s extractive industry. The study examines the existing legal and institutional framework for mining and investment in Malawi. Loopholes in the existing laws are identified and suggestions are made on the possible policy changes."