All around the world, there is a power relationship between those with capital and assess to capital and those that need it. Those that need it will have to pay higher rates or give more stringent demands to those that have access to credit. It is the same if you are a first type home buyer with minimal downpayment to development of resources in Africa.

In an article by Taiwo Adebayo of the Associated Press, the head of the African Development Bank Akinwmi Adesina is calling for an end to loans given in exchange for Africa’s rich supplies of oil and minerals. In recent times, deals with China allowed Chinese companies to gain control of resources and left some African countries in financial crisis.

Mr. Adesina said the deals come with a litany of problems. The uneven nature of negotiations, with lenders typically holding the upper hand and dictating terms. There is a power imbalance, lack of transparency and potential for corruption.

Mr. Adesina believes countries should use the African Development Bank and the International Monetary Fund to promote sustainable debt management.

One of Mr. Adesina’s bad loans is the country of Chad borrowing money from Glencore to develop oil in the country. Most of the money from producing oil goes to Glencore to pay off the loan as opposed to general revenues to help the people of Chad.

At least 11 countries have taken dozens of loans worth billions of dollars secured with natural resources since the 2000’s and China is the top source of funding through policy and state linked banks. An example is in the Congo signed in 2008. The financing gives Chinese firms such as Sinohydro and China Railways Group a 68% in a joint venture for copper and cobalt with Congo’s state mining company, Gecamines.

Last year, the state auditor demanded China’s infrastructure investment commitment be raised from $3 billion to $20 billion to match the value of the resources sold by the state. China rejects the auditor’s report.

Linking to dividend paying companies, when you invest for the long term, although you hope the relationships are win-win, the reality is because the company is profitable, the relationships can be one sided, but that is life. If the investment was never made or no risk was taking, the land would be or could be not developed. When the land is developed other spinoffs happen and can happen which allows at the macro level, the benefits are spread out.

There are more questions than answers, till the next time – to raising questions.