TheCable

Dele Alake, minister of solid minerals development, has asked African leaders to use the proven mineral reserves in their countries as equity in joint ventures instead of taking loans that worsen the plight of their people.

Alake made the suggestion while speaking at a ministerial roundtable on powering Africa in Washington DC, according to a statement on Monday, signed by Segun Tomori, the minister’s special assistant.

The minister criticised the undue pressure exerted on African governments by loan marketers, despite global concerns regarding many countries’ diminishing ability to repay their debts.

He advocated for an alternative to loans, suggesting the utilisation of established mineral reserves as a form of equity.

“It is an interesting paradox that in spite of 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,” the minister said.

“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.”

Alake said only loans capable of being repaid through project returns should be pursued, aiming to alleviate poverty among the people.

“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,” the minister said.

“Therefore, I believe African governments should exercise patriotic circumspection and due diligence before committing their sovereignty.”

‘WE ARE ACTIVELY WORKING TO SANITISE THE MINERALS SECTOR’

Speaking with delegations from the United States International Development Finance Corporation (IDFC), Alake conveyed the vision of President Tinubu’s administration to revitalise the sector, enhancing its competitiveness to attract investments.

According to the minister, 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,” he said.

“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.”

Alake highlighted Nigeria’s wealth of 44 essential minerals available in significant quantities, stating that ongoing reforms under the Tinubu administration aim to sanitise the sector, rendering it attractive to major investors.

In her remarks, Agnes Dasewicz, chief operating officer of IDFC, commended 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,” she said.

“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.”

According to the statement, ongoing discussions will continue between the minister’s team, including Fatima Shinkafi, executive secretary of the solid minerals development fund (SMDF), and other key ministry officials, and delegates from the US IDFC to facilitate collaborative efforts.