Use Mineral Reserves As Equity, Not Loans-Alake To African countries

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. 

Dr. Alake made this known at a Ministerial Roundtable on Powering Africa in Washington DC .

The Minister frowned at unwholesome pressure on African governments by loan marketers despite global concerns over the declining capacity of many countries to settle their debts.

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.”

”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“.

The Minister explained that the Tinubu Administration is set 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 data, which is exploration. We are actively working to sanitise the sector, including establishing a new security architecture to secure the mining environment”, he noted.

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 which is poised to sanitise the sector and make it attractive to big players.

In her submission, the Chief Operating Officer of the United States International Development Finance Corporation, IDFC, Mrs. Agnes Dasewicz who lauded the renewed focus on solid minerals by Nigeria, pledged her corporation’s interest in providing the required support to strengthen the mining sector value chain.

”We partner 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” she stressed.

“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.

By Georgina Humphrey, Edited By Grace Namiji