05/02/2025
The Quandary for Africa's Miners and Governments: Another Perspective
In an article called "The Quandary for Africa's Miners and Governments", columnist Clyde Russell argues that African mining companies face a choice between aligning with the U.S. or China under a Trump Presidency 2.0. I like Trump and am a proponent of capitalism, so believe this quandary is quite straightforward.
African governments should prioritize selling their minerals to those who will pay them with hard assets, as assets not only generate income but also have the potential to appreciate over time. In practical terms, that means African countries should sell their resources to China.
Let me explain why.
Africa is rich in hard assets like minerals, gold, oil, and diamonds. On the other hand, the U.S. offers the Dollar. While the dollar was once a promissory note backed by gold, the U.S. has blocked the redemption of gold for over 50 years. So now, what does the dollar represent?
• A currency that can be exchanged for other assets
• A promissory note that can be used to buy US Bonds, which, in turn, are promissory notes to give you back dollars.
Here’s where the problem lies:
• If an African country tries to exchange "their" U.S. dollars with about 30 other countries, many of which are their neighbors, they risk breaching U.S. sanctions. This creates a serious obstacle in the way of legitimate trade and financial security.
• If in the future the U.S. decides to sanction the African country, (pick any reason), it will simply seize the dollars (the promissory notes) it previously gave in exchange for hard assets. Essentially, the U.S. holds the power to take back its dollar "promises" while keeping the African countries tangible wealth.
Now, contrast this with selling minerals to China. In exchange for infrastructure paid for by minerals—rather than dollars—African nations would receive assets that could genuinely contribute to the long-term growth of their economies. These assets, unlike fiat currency, are tangible and have real value.
There is, of course, a potential downside. If an African country opts to sell its minerals to China, the U.S. could use its A.I.D. programs to counter this decision. Many people see U.S. A.I.D. as a form of humanitarian aid, but in reality, it is often a tool used by the U.S. government to influence and destabilize developing countries, ensuring they remain aligned with U.S. interests.
Ultimately, politicians everywhere act based on their own agendas, and the decisions made by African governments may not always align with the best economic outcomes. But from a strictly capitalist perspective, the option to sell to China and secure hard assets appears to be the clear choice.
