The approval of $1 billion (about N307 billion) by the Senate for the completion of the Ajaokuta Steel project may have rekindled hope for Nigeria’s march to industrialisation. But it remains to be seen if the Federal Government is on the same page with the National Assembly which has called on government to clear all hurdles on the way of the steel plant.
According to the Senate, the amount should be spent from the Federal Government’s share of the Excess Crude Account (ECA).
We welcome the Senate’s decision because of the multiplier effect the completion of the steel project will have on other sectors of the nation’s economy. However, one area of concern over the completion of the steel project is the disagreement between the government and the lawmakers. While the government wants to concession the plant, the lawmakers are opposed to the plan which they described as a waste of over $8 billion reportedly invested in the project since 1979. We believe that the way forward is to urgently resolve all issues that have hampered the completion of the plant. Anything short of this will further dim the hope of realising the main objective of the steel project.
There is no doubt that the Ajaokuta steel complex has the capacity to industrialise the country. It is unfortunate that over the years, the Ajaokuta steel plant has suffered in the hands of successive governments’ lack of political will to see it through. But in March this year, the former Minister of Mines and Steel Development, and now Ekiti State governor, Dr. Kayode Fayemi, said the present administration would not spend any money to complete the steel plant. He said the investment in the plant estimated at almost $8 billion since the conception of the plant yielded little results.
We do not support government’s argument that since “Ajaokuta steel plant is an inherited challenge” from Olusegun Obasanjo’s administration, its completion should not be fast-tracked. Since government is a continuum and the steel plant is vital to the nation’s industrialisation, the present administration should show commitment to ensure its completion.
Over the past 15 years, the project has suffered reversal of policies. In 2003, the Obasanjo administration concessioned the project to Messrs SOLGAS Energy, USA, on a ten-year tenure. A year later, the contract was terminated due to alleged non-performance and another concession was granted to Global Infrastructure Steel (Nigeria) Limited which the administration of Umaru Yar’Adua later revoked. The case went to the London Court of Arbitration. Its resolution led to a modified agreement in 2016 which ceded the steel plant back to the Federal Government and to Global Steel.
We are aware that the Federal Government has instituted a technical audit of the steel plant. Also, about 14 companies from different countries have reportedly shown interest in running the complex. PriceWaterhouseCoopers was engaged to do a review of the company’s indebtedness and statutory liabilities as part of the settlement agreement. It is important to complete the technical audit report as soon as possible and announce the successful bidders. The bidding process must be open, transparent and independently verifiable.
It is sad that the Ajaokuta Steel project has been unduly politicised by successive administrations. We think that it has become expedient now for the government to muster the political will to complete the project. The government should also be reminded that the completion of the Ajaokuta steel project will lead to the diversification of the economy. The steel project has the capacity to create jobs and the much-needed revenue for the country. It will make the country to be less dependent on oil revenue.
If the Federal Government is indeed committed to return the nation to the path of industrialisation, the completion of the Ajaokuta Steel project must be pursued with vigour. The idea of concessioning the project at this stage is uncalled for. Above all, let the project be completed without further delay.