From Import Dependency to Domestic Production: A Special Purpose Vehicle Model for Transforming Malawi’s Salt Mining Sector

Abstract

Chrispine Shani and Alinafe Checho Mpoka

Malawi’s economic stability is perennially threatened by acute foreign exchange (forex) shortages, which constrain the importation of essential goods and undermine macroeconomic stability. This article investigates a critical, yet overlooked, contributor to this challenge: the nation’s growing dependency on imported salt. Paradoxically, despite possessing significant commercial salt deposits in Nchalo, Chikwawa District, Malawi imports over 60,000 metric tons of salt annually, representing a substantial drain on its limited forex reserves. This paper presents findings from a mixed-methods study involving 43 respondents, including artisanal miners, government officials, and industrial food processors. The research quantifies the widening gap between domestic supply and demand, identifies key barriers hindering the local salt industry—such as prohibitive compliance costs with iodization regulations, lack of technology, and market exclusion—and analyses the macroeconomic implications of this import dependency. To address this, the article proposes a transformative framework centered on the establishment of a Public-Private Partnership to create a Salt Special Purpose Vehicle (SPV). This strategic intervention aims to scale up production, integrate artisanal miners into the formal value chain, achieve significant import substitution, conserve millions in foreign exchange, and catalyse inclusive economic growth.

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