It is a deft move that should be encouraged
In what could be described as cheering news from the mining sector, the Minister of Mines and Steel Development, Dr. Kayode Fayemi, said recently that the government was putting in a lot to ensure that the Ajaokuta Steel Complex “gets back to life”. Pledging that it “would no longer be run as a public concern”, Fayemi added that investors with proven track records and financial capability would be encouraged to buy into the scheme through a competitive and transparent bidding process.
To say that the Ajaokuta Steel Company Ltd (ASCL) has for decades been a metaphor for broken dreams and gross mismanagement is to put the situation mildly. It was once tagged, without any exaggeration, as the world’s biggest “white elephant project.”
Located on 24,000 hectares of sprawling green-field landmass, the contract for the project was signed between the federal government of Nigeria and Messrs Tyajzhprom Export (TPE) of the former Soviet Union in 1979 during the regime of General Olusegun Obasanjo as military head of state. But the company, earlier labelled as Nigeria’s “bedrock of industrialisation” has over the years become an emblem of shame and waste, such that Fayemi revealed recently that the federal government spent over $10 billion on the steel company without providing the technological and the iron and steel needs of the country. Though about 98 per cent technically completed as at the time the project was sold to some Indians, it was later abandoned allegedly after valuable assets had been stripped. Following that misadventure, Ajaokuta was left to rot in one of the most embarrassing cases of scavenging in recent history.
It is therefore heartening that the federal government is determined to ensure that the past is consigned to history. It has renegotiated the concession agreement with Global Steel Holdings Limited and Ajaokuta has at last returned to the government, thus ending the long-drawn dispute that has lasted for almost a decade. Indeed, Vice-President Yemi Osinbajo was so impressed that all the encumbrances that made it impossible for two major national assets to function had been overcome. “It is a tragedy of immense proportion that we have both Ajaokuta Steel Complex and NIOMCO and couldn’t get anything out of them for years,” he said. That settlement, according to Fayemi, was a pointer to what to expect in the government’s determination to fix the Nigerian mining sector. “This is one of the key milestones in the road map for the growth and development of the Nigerian mining sector,” he said.
The travails of the country’s economy in the past few years have exposed the dangers of over-reliance on a mono-product. The lessons from total dependence on oil and gas as the only dependable source of foreign exchange earner are too cruel on the economy to gloss over. President Muhammadu Buhari has repeatedly promised to diversify the Nigerian economy. Some noticeable efforts are being made in the area of agriculture. The iron and steel industry offers yet another good alternative. The sector will not only create massive jobs for many of the country’s unemployed graduates, it will catalyse industrial growth.
It is in this light that we approve of the government’s intention to privatise Ajaokuta Steel Company. Even if only N4 billion was allocated to the company in the present appropriation bill, the prospects for the steel company are good. If properly managed, it could help trigger the much-needed industrialisation in the country as well as stimulate growth in the iron and steel subsector. We implore the government to ensure, as it has assured, that only competent investors with proven records, selected through an open and transparent bidding process should be awarded the Ajaokuta prize. We cannot afford the costly mistakes of the past.