Nigeria’s steel sector, especially the Ajaokuta Steel Company, is a perfect illustration of why Nigeria’s industrialisation or attempt at one remains stunted. Good ideas, great promise, lifting so much hope of an industrialised Nigeria but effectively squandered on the altar of corruption and incompetence.
The other day, the Ministry of Mines and Steel Development declared, after a team from the ministry led by the Permanent Secretary visited the Ajaokuta industrial complex for an on the spot assessment of its condition and what to be done to move it forward, that the Federal Government would now seek alternative sources of funding the company. That alternative sources will take the form of signing Memorandum of Understanding (MOU), to complete the remaining part of the plant.
This new move certainly cannot elicit much enthusiasm among Nigerians. Such high expectations had been elicited at inception through the abundant opportunities offered by the high quantity and quality of iron ore deposit in Ajaokuta. Unfortunately, decades of unfulfilled promises would appear to have done severe damage to the project if not annihilated the chances of building anything out of it. Along with it have also died hopes and expectations.
This squandering of the hope of industrialisation and positive multiplier effects such as job creation, foreign exchange earnings and the like, is not unconnected with a number of factors, all rooted in a peculiarly Nigerian malaise. The first relates to the unserious attitude of successive Nigerian governments to business agreements. It would be recalled that under the privatization programme of the Olusegun Obasanjo administration, the Ajaokuta Steel Company was given out on concession to Global Infrastructure Holdings Limited for $300 million. However, following allegations of asset stripping against the company, the concession was terminated by the late President Umaru Musa Yar’Adua’s administration, who appointed a sole administrator to run the place. Other companies, most notably SOLGAS, an American energy company, have suffered similar fate at different times.
Besides, the high degree of policy inconsistency also remains a major source of problem affecting the company. It is on record that successive governments in Nigeria have a way of always aspiring to discredit and undo what their immediate predecessor did as though to score and accumulate cheap political capital. By concessioning today and deconcessioning tomorrow, a wrong signal is being sent to the global community of investors who would take it that extra-precaution is required in doing business with Nigeria. This presupposes the absence of a well-crafted and codified developmental road map for the country, especially regarding industrialisation.
Moreover, endemic and systemic corruption that has become second nature to Nigeria has not helped matters. Because of the huge and varied opportunities the steel industry offers political leaders to lubricate the wheels of their extended patronage networks and fill their pockets, it would seem there is a deliberate ploy to keep the steel project down. Over the years, successive administrations seemed to cash-in on the underdevelopment of the company to further their political and economic interests. The latest in this trend was that jamboree visit of the ministry and the resultant search for new sources of funding. No doubt, President Goodluck Jonathan’s Transformation Agenda needs a transformed steel industry but unseriousness seems to be government’s posture on this.
The result is that many would-be investors no longer have confidence in the industry in particular and in Nigeria in general. The lack of credibility also means that investors can no longer take the Nigerian government serious on the project. The acute demonstration of lack of character and gross irresponsibility thereof, are bound to always resurrect and confront successive Nigerian governments in the new search for investors in the company.
It is so unfortunate that Ajaokuta rather than be a major part of the solution, has become part of the problems of Nigeria to be solved. This is at a time when other countries are moving at a faster pace on the industrialization lane. The Chinese, for example, have just celebrated getting the fastest train running.
Nigeria cannot afford to continue along this path of self-destruction. If the whole hue and cry about the transformation agenda will ever transcend the realm of cliché, one of the surest ways of doing that is to find a sustainable way of making the steel project work. The starting point will be dealing decisively with the flip-flops of Nigeria as a foundation for regaining some measure of international credibility and restoring investors’ confidence in the industry and in Nigeria.