The Minister of Solid Minerals Development, Dr Dele Alake, has urged mineral- rich African countries to use their proven mineral reserves as equity in joint ventures.
The minister made the call while speaking at the Ministerial Roundtable on Powering Africa in Washington DC.
In a statement by his Special Assistant on Media, Segun Tomori on Monday in Abuja, the minister was quoted as saying that the move was better than taking loans, which worsened the plight of their people.
He lamented the undue pressure African governments faced from loan marketers, despite global concerns about the declining capacity of many countries to repay their debts.
” 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.
“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,” he said.
Alake, who also serves as the Chairman of the African Minerals Strategy Group, the body of ministers of mining and mineral development in Africa, urged an alternative to loans, suggesting the use of proven mineral reserves as equity.
” In the mining sector, in-situ equity, where the verified value of un-extracted mineral can be the equity of the owner in joint ventures, is a better financial arrangement than the road to chronic indebtedness.”
He said that only loans that could be repaid with the returns from the project should be taken 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.
“ Therefore, I believe African governments should exercise patriotic circumspection and due diligence before committing their sovereignty,”he said.
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), he shared the President Bola Tinubu Administration’s vision of repositioning the sector to compete with others for investment.
According to him, the administration has focused on developing the critical minerals sector to diversify the economy away from reliance on oil.
He added that the administration was determined to sanitise the mining sector, including establishing a new security architecture to secure the mining environment and providing the necessary to aid in making critical decisions.
Speaking further at the parley with the Chief Operating Officer (COO) of the U.S. IDFC, Agnes Dasewicz , he mentioned that Nigeria possessed 44 critical minerals in commercial quantities and is reforming the sector to attract major players.
On her part, Dasewicz lauded the renewed focus on solid minerals by Nigeria and expressed her corporation’s interest in providing the required support to strengthen the mining sector value chain.
She said that their corporation partners with private sector players to deliver financing to mining companies to facilitate their expansion.”
She said that her organisation has the interest in engaging Nigeria in its critical minerals sector, especially as it has great potential.
To implement areas of partnership, further engagements will continue between the minister’s team 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 delve deeper into the mining sector.