The Minister of Solid Minerals Development, Dr. Oladele Alake, has recommended that mineral-rich African countries capitalize on their verified mineral reserves by using them as equity in joint ventures, rather than resorting to loans that could further burden their populations.
Alake made this recommendation during his address at the Ministerial Roundtable on Powering Africa in Washington DC, according to a statement released on Monday by Segun Tomori, the Special Assistant on Media to the Minister of Solid Minerals Development.
- “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 was quoted as saying.
Alake expressed concern over the aggressive tactics of loan marketers pressuring African governments to accumulate more debt, amidst global worries about the diminishing capacity of many nations to service their debts.
Drawing from his background as a journalist, Alake revisited his criticisms of African governments’ reckless borrowing habits. He stressed that only loans which can self-liquidate through their returns should be pursued to safeguard the populace from poverty.
Alake also pointed out the Nigerian government’s habit of quickly accepting loan agreements with adverse terms for the citizens, urging thorough and patriotic scrutiny before making such financial commitments.
- “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,” Alake said.
More insights
- The statement highlighted that during the conference, Alake had productive discussions with potential investors, including representatives from the United States International Development Finance Corporation (IDFC).
- In these discussions, notably with Agnes Dasewicz, the COO of the US IDFC, and her team, Alake presented the Tinubu administration’s initiatives to boost the mining sector and attract investments.
- He emphasized the development of critical minerals to diversify away from oil reliance, the importance of data collection, and the need for a secure mining environment. Alake also pointed out Nigeria’s rich endowment in 44 critical minerals and the ongoing efforts to reform and enhance the sector to draw in major investors.
- Dasewicz, in turn, recognized the potential in Nigeria’s solid minerals sector and confirmed her corporation’s commitment to fostering growth in the mining industry.
- “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,” Dasewicz said.
- Future collaborations will be discussed between the Minister’s team, including the Solid Minerals Development Fund (SMDF) and the US IDFC.
- Alake also engaged with various private sector representatives, such as KRL International, to deepen their interest in Nigeria’s mining industry.
