AfDB’s President: Advocates for a Stop to the Practice of Offering Loans in return for Access to Africa’s Reserves and Critical Minerals

By Abdul Rahman Bangura-

NEW AFRICA DAILY NEWS (NADN) Freetown, Sierra Leone– “They are just bad, first and foremost, because you can’t price the assets properly. These are the reasons I say Africa should put an end to natural resources-backed loans. These countries renegotiate those loans that are asymmetric, not transparent and wrongly priced”.

The AfDB’s boss underscored that, those loans collateralized with natural resources present challenges for development banks, encompassing his own and the International Monetary Fund, which advocate for sustainable debt practices.

Such is tantamount in trampling nations from obtaining or repaying loans from these institutions, as they must allocate revenue from critical natural resources to settle debts linked to those resources.

He cited to the hash economic crisis in Chad, where Chad had to make do with a vital portion of its oil income to repay a loan backed by oil from the commodity trading company Glencore, illustrating the impact of such debt agreements.

Dr. Bank’s Chief stated that, African frugality should be valued based on their natural resources as it will multiply the more for the Landmass.

Quite recently, there have been a sharp increase in resource backed loans across Africa. A study by the World bank stated that around 10% of loans to countries across the continent between 2004 and 2018 were backed by natural resources.

Africa’s natural resources especially solid minerals such as lithium, cobalt and others are spurring a rush globally as the world transitions from fossil fuels to other renewable and cleaner energy source.

For New Africa Daily News Abdul Rahman Bangura Reports, Africa Correspondent