“Use your mineral reserves as equity instead of taking loans” Minister Dele Alake to African Nations

Dr. Dele Alake, the Minister of Solid Minerals Development, has offered a piece of advice to African nations.

A plea was made to mineral-rich African nations to use their abundant mineral reserves as equity in partnerships, instead of turning to loans that worsen the situation for their people.

During his speech at a Ministerial Roundtable on Powering Africa in Washington DC, Alake criticized the excessive pressure exerted on African governments by loan marketers. He emphasized the negative effects of increasing debt burdens on national economies.

Alake, who chairs the African Minerals Strategy Group, emphasized the importance of implementing an alternative financial strategy in the mining industry by promoting the use of in-situ equity.

According to the explanation provided, the strategy revolves around using the confirmed worth of untapped minerals as a form of investment in collaborative projects, presenting a more enduring alternative to continuous financial obligations.

Aleke said: “It is an interesting paradox that despite 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.

“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.”

Reflecting on his past experiences as a journalist critiquing indiscriminate loan agreements, Alake emphasized the importance of responsible borrowing, cautioning against loans with onerous conditions that disproportionately affect ordinary citizens.

During sideline discussions with the United States International Development Finance Corporation (IDFC), Alake outlined the Tinubu Administration’s commitment to revitalizing the mining sector and attracting investment.

He underscored the administration’s focus on developing critical minerals to diversify the economy away from reliance on oil, emphasizing the need for support in areas such as exploration and enhancing security measures in mining environments.