About $3.3 billion is spent on steel importation annually. This is projected to rise to $15 billion. But, despite parading the record of having the second largest iron ore deposit in Africa, Nigeria has, curiously, failed to breathe life into the moribund Ajaokuta Steel Company in Kogi State. The project has become a huge drain pipe and a campaign tool for successive administrations. Assistant Editor CHIKODI OKEREOCHA writes that unless the facility is resuscitated, Nigerian industrialisation drive will remain a mirage.
President Goodluck Jonathan, at a campaign rally by the Peoples Democratic Party (PDP) in Kogi State, dangled the proverbial carrot before the electorate. He promised the completion of the moribund Ajaokuta Steel Company (ASCL), Nigeria’s largest integrated steel plant tagged: “bedrock of Nigeria’s industrialisation.”
At the rally, which was held at the Lokoja Confluence Stadium, President Jonathan told a crowd of party supporters that all the legal issues that slowed down the multi-billion dollar project expected to produce 1.3 million metric tons (MT) of liquid steel per annum,have been resolved to pave the way for its completion.
Jonathan’s words: “The Ajaokuta Iron and Steel Complex is dear to us. This is a government that promises and fulfills its promises. During my inaugural speech in 2011, we made promises in that speech and we have addressed all. We are addressing the issue of the Iron and Steel Company. We are not playing politics with it. The Attorney-General has been handling the legal issues. We have been slowed down because of legal issues. The Attorney-General has travelled to London more than 20 times and now we have got to the end, we will move ahead.”
However, the President’s hope of riding on the promise of completing the project to curry votes at last weekend’s presidential election was dashed Although, ASCL holds the collective aspiration and desire of Nigerians for self-sufficiency in steel and halts the unbridled importation of steel products that costs the nation an estimated $3.3 billion annually, The Nation learnt that a few indigenes of the state, who were at the rally, refused to be swayed by what they considered an empty promise.
Their skepticisms are justified. Since September 1979, when the project was conceived with the vision of generating important upstream and downstream industrial and economic activities critical to the diversification of the economy into an industrial one, it has been a tool for campaign promises by successive administrations, which never came to pass. The project suffered the same fate in 2011 when Jonathan campaigned for his first term in office. To most indigenes of the state and indeed, Nigerians, the President was merely playing to the gallery as the fortune of the steel plant has never improved since his administration mounted the saddle.
Located on 24,000 hectares of sprawling green-field land-mass, the Steel Plant, built on 800-hectares of land, was embarked upon as a strategic industry, a job creator and a foreign exchange earner. It was envisaged that it would generate a myriad of socio-economic benefits and increase the productive capacity of the nation through its linkages to other industrial sectors.
Using thetime tested Blast-Furnace – Basic Oxygen Furnace route for steel production, the project would also provide materials for infrastructural development, technology acquisition, human capacity building, income distribution, regional development and employment generation. While the project would directly employ about 10,000 staff at the first phase of commissioning, the upstream and downstream industries are expected to engage over 500, 000 employees, among other benefits.
Unfortunately, none of the benefits has come the way of Nigerians 36 years down the line. If anything, it has become a0huge drain pipe on the nation’s resources, as Nigeria, according to Minister of Trade and Investment, Dr. Olusegun Aganga, continues to spend about $3.3 billion annually on steel importation. The Minster, who spoke at the commissioning of the Cld Roll Mill Project of Kamwire Industries Limited in Ilorin, the Kwara State capital recently, projected that the import bill may rise to $15 billion in the next 10 years.
“We spend $3.3 billion every year importing steel. In the next decade because of the way we are growing that $3.3 billion will become $15 billion,” Aganga said, warning that: “We will not be able to afford it as a nation and it will become a balance of payment deficit. That is why we came up with the industrial revolution plan.” While pointing out that the sector is the backbone of any economic or industrial development in any nation, the Minister said the current administration was “determined to take the risks and forcefully revolutionise industrialisation in Nigeria.”
Experts have, however, called to question the current administration’s commitment to its industrialisation mantra, insisting that it failed in the last six years to match words with action by mustering the political will to complete the ASCL. This is despite the fact that a developed and virile steel industry would not only save the nation scarce foreign exchange, but create opportunities for varied capacity building. Besides, the project, according to experts, holds the key to the attainment of vision 20-2020 and the Federal Government Transformation Agenda.
Rather than help the country achieve these objectives, ASCL has become a subject of intense controversy and politicking by various interests. It was the clash of interests that culminated in the termination of the concession agreement between the Federal Government and Global Infrastructure Nigeria Ltd (GNIL), an Indian firm, in 2008. Although, the Federal Government had accused the Indian firm of breaching the provisions of the concession agreement and asset stripping, the company had gone to the International Court of Arbitration in London, challenging the revocation of the agreement.
Although, Jonathan said all the legal hurdles slowing down the project have been removed, the project has been a subject of legislative scrutiny following revelations that the country was paying huge sums of money to the company’s idle staff. This has pitched members of the House of Representatives against the management of the facility, which insisted that certain forces are bent on frustrating efforts at getting the project back on track.
According to the company’s Sole Administrator, Mr. Joseph Onobere Isah, an Engineer, “There are certain agents in our midst that have not been comfortable with the modest achievements we have recorded in Ajaokuta so far and the course of action we are charting towards making liquid steel production a reality in our country. Isah, who spoke while presenting the achievements and challenges of the steel plant before members of the House of Representatives Committee on Steel Development in Abuja, said such forces might have been responsible for the allegation of staff idleness levelled against the company.
He said contrary to the allegation, the company’s staff work tirelessly daily to ensure that the plant was well-maintained and running. The staff, according to him, were not being paid N3.4 billion monthly as the Chairman of Assets Management Company of Nigeria (AMCON) Alhaji Aliyu Kola Belgore, reportedly said last year at an event in Ilorin. Isah, who said Belgore wrote to explain that he was misquoted, reminded the House Committee members that it was because of Belgore’s statement that he was summoned, following a motion by a member of the House of Representatives, Hon. Abbas Tajudeen, that the claim be investigated.
He explained that Belgore, in a letter to the management dated September 8, last year, denied the newspaper stories, stating in part: “I did not and will never disparage the company as I do not work there. It is out of place for me to know and mention anything about the total monthly wage bill, the number of machines installed and the number of staff of the company.” However, he said: “The recent motion by Hon. Abbas Tajudeen, coming after over four months of the publication and echoing the AMCON Chairman’s statement and newspaper publications, deserves to be investigated to stop the vicious circle of misinformation.”
The ASCL Sole Administrator urged the Committee to authenticate Hon. Tajudeen’s allegations. He recalled that the House of Representatives Committee on Steel recommended N3, 821,718,510 to the Appropriation Committee as the 2014 Personnel Cost for ASCL. The Appropriation Committee of the National Assembly, he said, approved the same amount as the 2014 Personnel Cost for ASCL and that it was the same amount that was in the 2014 Appropriation Bill for the 2014 Personnel Cost (salaries) of the company.
Isah said: “From the foregoing, the onus of providing evidence to back the AMCON chairman’s figure of N3.4 billion as ASCL monthly wage bill, which has been severally quoted, naturally falls on Alhaji Belgore. The House of Representatives Committee on Steel would do well to demand such evidence from Alhaji Belgore. Should there be any proof of a hike in the figure known to Alhaji Belgore, then he could avail the Committee of it.”
The Accountant-General of the Federation and the Director-General (Budget), he said, could be asked to tender the releases made through IPP1S (Integrated Payroll and Personnel Information System) in respect of Ajaokuta Steel Company’s Personnel Costs last year. “To the best of our knowledge, it is what was appropriated that was paid to staff by the Accountant-General of the Federation via 1PPIS,” he said, adding that since July 2012, preceded by a diligent and thorough data capturing exercise, the salaries of ASCL workers are paid directly to respective staff members from the Office of the Accountant-General of the Federation via the IPPIS.
Isah said these facts were known to all, adding that after the takeover of the company from the Indians (GHIL/GINL concessionaires) in 2008, ASCL has been on zero capital allocation and an overhead of less than N45million. “All such information is in the public domain and on the website of respective ministries,” he said, adding: “It is common knowledge that any piece of commissioned equipment left idle will sooner than later be lost to rot due to corrosion.”
