RESOLVING THE AJAOKUTA CONUNDRUM
The terms of the concession should be clearly defined
Almost 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 the ongoing debate is about whether the outfit said to be almost completed should be concessioned or sold as scrap. 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.
The unfortunate thing about the Ajaokuta story is that nobody knows what to believe anymore. In 2014, the then 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 were reportedly 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 concessions, asset stripping and all manner of sharp practices in the name of making the project work.
Only recently, 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 that fits the “right profile.” While it rankles that the country had to cough up a princely $400 million ‘to rescue’ the moribund national asset from legal issues, we do not know the parameters that confer ‘right profile’ status on the potential investors, given our bitter experience in the past. In a clime where personal and group interest supersedes national interest, who determines the concessionaire with the ‘right profile’?
On the face value, the president had listed some of the expected benefits of the Ajaokuta concession, which include the creation of over 500,000 jobs and more than $1.6 billion in annual income to the Nigerian economy. This is music to the ears, but we are yet to see how the federal government will give practical expression to this high-sounding figure.
We have heard so much of such soul-lifting promises in the past in several sectors of the economy, but they all ended as mere tales.
To be clear, the federal government has settled for the concession option and has gone ahead to appoint transaction adviser for the concessioning of the steel company. What Nigerians are eagerly awaiting is for the process to be completed. It would amount to an unpardonable sin for the concession to go awry and the much-advertised benefits by the Buhari administration to become a pipedream.
We are bothered by the proclivity to the waste of scarce resources in the country, especially at a time the population is growing at an alarming rate and the economy is slowing down. We feel that such national assets should either be turned around for economic benefits to the country, or at best be handed over to entities that can make the most of them so they can create jobs for our people. On that note, we support all efforts to concession Ajaokuta. We urge the relevant agencies to ensure that the terms of the concession are clearly defined and spelt out. 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.
