Debt and extractives nexus: the need to strengthening coordination between and among different actors
Debt and extractives nexus: the need to strengthening coordination between and among different actors
There is a link between debt and extractives and this link can be understood through resources backed loans (RBL). The focus on RBL has gained traction and has been an important feature of fiscal tension in several resources rich countries following the aftermath of the Covid-19 pandemic which started as a health problem and transformed into a full-blown economic problem.
Resources backed loans are defined as are all loans provided to a government or a state-owned company, where: repayment is either made directly in natural resources (in-kind) such as oil or minerals, or from a resource-related future income stream; or repayment is guaranteed by a resource-related income stream, or where a natural resource asset serves as collateral. Given that the work on resources-based loans in Africa has be fragmented as different stakeholders are working in silos, a coordinated approach is needed.
As a step to consolidate and coordinate all efforts on RBL, the Natural Resources Governance Institute (NRGI), Extractives Industries Transparency Initiative (EITI) and the Organisation for Economic Cooperation and Development OECD convened a round table meeting to understand what different stakeholders were doing, identifying possible areas of collaborations and to galvanize conversation on the link between debt and extractives. As a thought leader on debt in Africa and a key player on extractives issues, the African Forum and Network on Debt and Development (AFRODAD) was the only CSO that was invited to this meeting to share its perspectives.