THE AJAOKUTA BOTTOMLESS PIT
It will pay the nation better to sell off the steel mill
More than half a century after it was conceived as a critical tool to the country’s industrialisation aspiration, the Ajaokuta Steel Mill remains a drainpipe. Such is the disappointment of Nigerians that for the past two decades, debates have largely centred around whether the edifice, said to be ‘almost completed’, should be concessioned or sold as scrap. Especially because every administration has had to waste enormous resources on what has become a huge cost centre. This is a sad commentary for a project that was said to have been 84 per cent completed as far back as 1983, and on which between $8 billion and $11 billion had been spent, depending on whose figures are being quoted.
Although we have heard the usual promises lately, the unfortunate thing about the Ajaokuta story is that nobody knows what to believe anymore. In 2014, the Director of Steel and Non-ferrous Metals Department, Ministry of Mines and Steel Development said the federal government had spent about $6 billion on the plant, and that only $513 million was needed for completion. The estimates, according to him, were from the report of a technical committee set up by the federal government. Same year, another committee headed by Daniel Maddo said it would require $1.2 billion for the steel complex to come on stream. Meanwhile, there have been failed concessions, asset stripping, and all manner of sharp practices in the efforts to make the project work.
In December 2022, the late President Muhammadu Buhari said the federal government had begun the concession process of the Ajaokuta Steel Complex by first rescuing it from “legal disabilities.” He stated that the process had cost the federal government over $400 million, adding that after the ‘legal rescue’, the federal government was looking for a private investor with the “right profile.” At the end, despite settling for the concession option and going ahead to appoint transaction adviser, nothing came out of the investments. That perhaps explains why when earlier this year, the Managing Director/Chief Executive Officer, Abdulsalam Naeem, promised that the steel company will come on stream under the current administration, not many people took him seriously. Nigerians have heard so much of such soul-lifting promises in the past, but they all ended as mere tales.
In fact, almost two years after the Minister of Steel Development, Shuaib Audu, promised a three-year road map to resuscitate the moribund steel company, there is nothing to suggest any action has been taken. “We are looking at where different aspects can be handled by different people with different core competencies,” Audu said at the time, while touting figures like his predecessors. “What we plan to do is to start the Light Steel Mill or the LSM section, which will cost us about N35 billion to be able to produce 50,000 metric pounds of iron rods.” This is music to the ears, but we are yet to see how the federal government will give practical expression to this promise.
On the face value, the last administration had listed some of the expected benefits of the Ajaokuta concession to include the creation of over 500,000 jobs and more than $1.6 billion in annual income to the Nigerian economy. However, we are bothered by the proclivity to the waste of scarce resources in the country that Ajaokuta represents. We therefore support the idea of concessioning it without having to invest any further public resources on the steel mill. With billions of Naira being expended to pay thousands of redundant workers, it is important that an amicable solution be found to what has since become a metaphor for waste, and broken dreams in Nigeria.
