Alake criticises desperate leaders, warns Africa against debt trap

CHAIRMAN of the African Minerals Strategy Group and Minister of Solid Minerals Development, Dr Oladele Alake, yesterday, called on African countries rich in minerals to consider using their proven mineral reserves as equity in joint ventures instead of taking loans that exacerbate their people's plight.

Alake expressed his concerns regarding the pressure faced by African governments from loan marketers, despite the global worry over their ability to repay their debts.

Speaking at the Ministerial Roundtable on Powering Africa in Washington DC recently, Alake deplored unwholesome pressure on African governments by lenders despite global concerns over the declining capacity of many countries to settle their debts.

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 underthe- 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, Alake said: “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."