Mkpoikana Udoma
Port Harcourt — The federal government has advised 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.
The Minister of Solid Minerals Development, Dr Dele Alake, who gave the advice, decried over what he described as unwholesome pressure on African governments by loan marketers, despite global concerns over the declining capacity of many countries to settle their debts.
Alake, speaking recently at a Ministerial Roundtable on Powering Africa in Washington, recalled how he had taken issues with indiscriminate loan deals of African governments while he was a journalist, and advised that only loans which can be liquidated by the returns on the project should be taken to save the people from poverty.
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.
He said, “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.
“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.
“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.”
