Alake blasts desperate leaders, cautions Africa against debt trap

The Chairman of the African Minerals Strategy Group and Minister of Solid Minerals Development, Dr Oladele Alake, has on Monday, March 11 entreated African countries rich in minerals to consider using their proven mineral reserves as equity in joint ventures instead of taking loans

Alake showed his concern over the enormous pressure African governments face from loan marketers, despite the global worry over their ability to repay their debts.

While speaking at the Ministerial Roundtable on Powering Africa in Washington DC recently, Alake 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 (MDAs).

“Indeed, in the first month after a minister is sworn into office, he is bombarded by these marketers promising above-the-table and under-the-table deals.

“In the mining sector, where the verified value of unextracted minerals can be the equity of the owner in joint ventures, is a better financial arrangement than the road to chronic indebtedness.”

Recalling how he had taken issues with indiscriminate loan deals of African governments as a journalist, he added: “Only loans that can be liquidated by the returns on the projects should be taken to save the people from poverty.

“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.”

BEB