Ajaokuta Steel: Nigeria’s metaphor for waste
Ajaokuta Steel: Nigeria’s metaphor for waste
THE National Assembly is on another round of ritualising. Last week, the Senate Ad-hoc Committee probing alleged corruption and inefficiency in the Ajaokuta Steel Company Limited and National Iron Ore Mining Company, and the state of Federal Government-owned companies, queried the N4.2 billion provided for the payment of salaries of ASC workers in this financial year. This is not the only problem at Ajaokuta, though.
Natasha Akpoti-Uduaghan (PDP, Kogi Central) pointed out that she usually saw only about 10 workers on the ground. For context, that figure would cover 14,000 workers at the rate of N300,000 per month or 8,400 workers at N500,000 per month. The sole administrator, Sumaila Akaba, insisted that workers were required to maintain the plant, which has produced practically nothing since it was commissioned in 1978!
During the session, the Senate panel rejected a memo from the Ministry of Steel Development on efforts to revive the plant because it was “watery.” The senators expressed outrage at the payment of $495 million to Global Infrastructure Nigeria Limited as an out-of-court settlement in 2022, even though the company did not invest a single dollar.
The probe is another time-consuming rigmarole. It will result in nothing. History proves that. Ajaokuta is a sordid reminder of Nigeria’s ability to fail where it matters most. It explains why the country remains a serial underperformer, saddled with debt, poverty, darkness, and leaders who go around the world begging for handouts from others. It is a metaphor for waste.
Sixteen presidents/heads of state have ruled Nigeria since the idea of setting up steel rolling mills was conceived in 1958, and 10 have been at the helm since the plant was declared 98 per cent complete in 1984, with 40 of the 43 plants at the facility already built.
It is a vast complex on 24,000 hectares with actual plants built on 800 hectares. It is to produce steel billets, sheets, strip and angle metals, wire rods, and rebars used for construction, and production of nails, fencing wire, rope mesh, bolts, and nut and netting. It was supposed to be Nigeria’s ticket to rapid industrialisation, yet it is comatose, a monument to the visionless, intellectually bereft leadership that has held Nigeria down.
Efforts at revival have so far failed because of a glaring lack of commitment, policy somersaults, and attempts at outsourcing solutions to a problem that should be addressed in-house. The government has pumped $8 billion into the plant, and steel imports amount to $4 billion annually. This is woeful economics.
Egypt produces about 10.6 million tonnes of steel annually; South Africa follows with 4.9MT per World Steel Association. Nigeria produces 2.2MT with scraps and billets imported mainly from China. Ajaokuta alone can produce 1.3MT of crude steel. Japan does not have the raw materials but produces 89MT annually.
Steel production is a major economic driver, providing the basis for several industries, particularly automobiles, shipping, railways, construction, manufacturing,and fabrication. The sector employs a diverse workforce, ranging from non-skilled workers to engineers and designers.
The Bola Tinubu administration is contemplating engaging a Chinese firm to revive the plant. All sorts of figures ranging from $500 million to $2 billion are being bandied by government officials to make that happen, pending an audit. This is a failed route.
It is ridiculous to continue spending billions of naira yearly to pay workers of a non-functional facility.
To end the waste, critical steps must be taken. Tinubu must make the plant work if Nigeria were to fulfil its industrialisation potential. So, the government should privatise Ajaokuta to make it functional
