Oxfam, a prominent anti-poverty charity, has said extractive industry is an alternative sector which can support the growth of the country's economy.
The extractive industry consists of any operations that remove metals, mineral and aggregates from the earth which include oil and gas extraction, mining, dredging and quarrying.
Oxfam Interim Country Director, Lingalireni Mihowa said this Thursday during an interface meeting with Parliamentary Committee on Natural Resources and Environment when her organization provided learning and sharing session on analysis of fiscal terms in oil contracts at Sunbird Capital Hotel in Lilongwe.
She said extractive industry could play a significant role in boosting the country's economy and it could be used as a right replacement for tobacco.
Mihowa pointed out that the industry needs to be given the necessary support for it to produce tangible results.
"There have been a lot of discussions on how best the country can improve on the governance of the sector. We have heard of case studies from other countries where people have discovered oil and mines," she explained.
Mihowa said the returns from the industry have not been impressive and if this would not be checked regularly the country would continue to lose on revenue generation.
She said this has made Oxfam to invest in research that could inform policy and regulation in the extractive industry.
"We brought together members of different parliamentary committees to be able receive our findings on production sharing agreement model analysis that we conducted. The findings were done in 2016 study where we did analysis of agreements signed by government in May 2014 on oil contracts based on blocks that were licensed," the interim director stated.
Mihowa explained that report has indicated that government could have negotiated better and the production sharing agreement model was yet complete.
She noted that the agreements were based on registration and an absence of fiscal regime in the oil sector and the report has provided guidelines on how government could handle the issues.
Chairperson for Parliamentary Committee on Natural Resources and Environment, Victor Musowa said the interactive meeting has provide an insight on how the members would be able articulate issues when discussing the new Mines and Minerals cast in parliament.
He said the meeting has empowered the committee to have a better understanding on how the sector is performing in the country and appreciate some of the challenges being faced.
Chairperson of Natural Resources Justice Network, Kossam Munthali said the network is not impressed on how some agreements on mines and mineral are being signed by government.
He said signing of such agreement need to take a more transparent and accountable manner because most of them affects the living standards of ordinary Malawians.