Alma Economics developed a detailed fiscal model for forecasting mineral revenues in Malawi. The model covered the entire Malawian tax system, showing how incentives interact and providing the Malawian government with a tool to predict revenues and more effectively negotiate with mining companies looking to operate in the country.

We initially reviewed the revenue forecasting techniques already in use by the Ministry of Finance, the Malawi Revenue Authority, and the Department of Mines. An important focus of the research was evaluating the current working relationship among the stakeholders regarding data sharing. An efficient exchange of data is needed for credible forecasts of mining revenue, including tax and non-tax revenue, e.g. royalties. Having assessed the strengths and weaknesses of the existing forecasting system, our team recommended specific reforms.

The fiscal model developed by our team additionally allowed for the estimation of the revenue effects of changes in tax policies and rates. The project concluded with the delivery of training on using the model for Malawian government officials.