The Minister of Solid Minerals Development, Dr. Oladele Alake, has urged mineral-rich African countries to use the proven mineral reserves of their countries as equity in joint ventures instead of taking loans that worsen the plight of their people.
Speaking at a Ministerial Roundtable on Powering Africa in Washington DC, the United States (U.S.) recently, Alake deplored unwholesome pressure on African governments by loan marketers despite global concerns over the declining capacity of many countries to settle their debts.
His words: ” It is an interesting paradox that inspite of their chronic indebtedness, African countries remain the target of institutional and private loan sharks marketing short and longterm credit to ministries, departments and agencies.
“Indeed, in the first month after a Minister is sworn into office, he is literally bombarded by these marketers promising above the table and under the table deals.”
Alake, who doubles as the Chairman of the African Minerals Strategy Group, the body of ministers of mining and mineral development in Africa, canvassed an alternative to loans, which he defined as using proven mineral reserves as equity.
His words: ” In the mining sector, in-situ equity, where the verified value of unextracted mineral can be the equity of the owner in joint ventures, is a better financial arrangement than the road to chronic indebtedness “.
Recalling how he had taken issues with indiscriminate loan deals of African governments as a journalist, Alake said only loans that can be liquidated by the returns on the project should be taken to save the people from poverty.
“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.”
The Minister’s presentation set the tone of his meetings with investors on the sidelines of the conference.
In top -level talks with the delegation of the United States International Development Finance Corporation (IDFC), Alake shared the vision of the Tinubu Administration to reposition the sector to compete with others to attract investments.
According to him, the administration has focused on developing the critical minerals sector to diversify the economy from oil.
“There are certain things that we need to bolster that sector, and all the support we can get is crucial. First and foremost is critical big data, which is exploration. We are actively working to sanitise the sector, including establishing a new security architecture to secure the mining environment. ” he said.
Speaking further at the parley with the Chief Operating Officer (COO) of the US IDFC, Agnes Dasewicz and her team, Alake stated that Nigeria has an abundance of 44 critical minerals that exist in commercial quantities, emphasising on-going reforms by the President Tinubu administration are poised to sanitise the sector and make it attractive to big players.
In her submission, Dasewicz lauded the renewed focus on solid minerals by Nigeria, emphasising her corporation’s interest in providing the required support to strengthen the mining sector value chain.
“We very much partner with private sector players to deliver financing to mining companies to help them really expand what they can do. Some of the focus sectors that we have are critical minerals and infrastructure; health and agriculture as well as energy. We would love to do more in the critical minerals sector, and we know there is a lot of potential in that regard, in Nigeria, “Mrs. Dasewicz added.
To execute areas of partnership, further engagement will continue between the Minister’s team comprising Solid Minerals Development Fund (SMDF) Executive Secretary, Fatima Shinkafi, other top ministry officials and representatives of the US IDFC.
The Minister also had fruitful deliberations with a cross section of private sector players in the mining industry, including KRL International, securing their commitment to take more than a cursory look at the mining sector.
*Segun Tomori
Special Assistant (Media)
Honourable Minister of Solid Minerals Development.
11th March, 2024.
