The Minister of Solid Minerals Development, Dr Dele Alake, has called upon mineral-rich African nations to utilize their proven mineral reserves as equity in joint ventures, rather than resorting to borrowing loans that exacerbate the plight of their citizens.
Addressing delegates at a Ministerial Roundtable on Powering Africa in Washington DC, Alake criticized the undue pressure placed on African governments by loan marketers, highlighting the adverse impact of mounting debt burdens on national economies.
Alake, who also chairs the African Minerals Strategy Group, stressed the need for an alternative financial approach in the mining sector, advocating for the utilization of in-situ equity.
This model, he explained, involves leveraging the verified value of unextracted minerals as equity in joint ventures, offering a more sustainable path compared to perpetual indebtedness.
Aleke said: “It is an interesting paradox that despite their chronic indebtedness, African countries remain the target of institutional and private loan sharks marketing short and long-term credit to ministries, departments and agencies.
“I have criticised the predilection of Nigerian governments to sign the dotted lines of loan agreements on the flimsiest excuse mostly with stiff conditions which hurt the common people. Therefore, I believe African governments should exercise patriotic circumspection and due diligence before committing their sovereignty.”
Reflecting on his past experiences as a journalist critiquing indiscriminate loan agreements, Alake emphasized the importance of responsible borrowing, cautioning against loans with onerous conditions that disproportionately affect ordinary citizens.
During sideline discussions with the United States International Development Finance Corporation (IDFC), Alake outlined the Tinubu Administration’s commitment to revitalizing the mining sector and attracting investment.
He underscored the administration’s focus on developing critical minerals to diversify the economy away from reliance on oil, emphasizing the need for support in areas such as exploration and enhancing security measures in mining environments.
