World Bank · University of Oxford · jamescust.com

Presource Curse Risk on the Horizon

Country Case Study

Malawi: A Mining Boom on Fragile Foundations

A portfolio of anticipated investments — and the classic conditions for a presource curse

In Brief

Malawi illustrates a critical extension of the presource curse concept: the trigger is not always a single giant discovery. In a country with low resource-sector maturity, a portfolio of anticipated mining investments can generate identical dynamics — elevated growth expectations, premature borrowing pressure, governance strain, and the risk of growth disappointments. The mechanisms are the same; only the trigger differs.

<1% Mining's current share of GDP (2024)
10–15% Government target mining share of GDP by 2027–2030
88% Public debt as % of GDP end-2024 — classified as in distress
$30bn Estimated 10-year mineral export potential (government estimate)

Lessons and Policy Implications

01

The trigger is anticipated wealth, not a single discovery

A portfolio of anticipated investments in a low-capacity state can activate the same presource mechanisms as a Jubilee-scale event. The presource curse is not limited to petroleum giants.

02

Overborrowing against mining expectations

Malawi is already classified as in external debt distress, with public debt at 88% of GDP. If capital markets extend credit against projected mining revenues before those revenues materialise, debt dynamics could deteriorate further and rapidly.

03

Growth forecasts that are already too optimistic

The government projects mining contributing 12% of GDP by 2027 from less than 1% today. Achieving a twelve-fold increase in three years would require simultaneous on-time delivery of multiple complex projects — an implausible scenario.

04

This case matters for critical minerals investment across Africa

The minerals in question — rutile, graphite, niobium, rare earths — are central to the global energy transition. The Malawi case is directly relevant to the new wave of critical mineral investment across sub-Saharan Africa.

References

  • IMF (2025). Malawi: 2025 Article IV Consultation. IMF Country Report No. 25/226.
  • Malawi Ministry of Finance (2025). Annual Economic Report 2025.
  • Mihalyi, D. and Scurfield, T. (2021). 'How Did Africa's Prospective Petroleum Producers Fall Victim to the Presource Curse?' Extractive Industries and Society, 8(1).
  • World Bank (2025). Malawi Economic Monitor, 21st Edition.

James Cust · Development Economics · World Bank / University of Oxford · jamescust.com