- We must get it right this time if we are truly desirous of industrialising
Thirty-seven years after its establishment, and eight years after a rather acrimonious parting with India’s Global Steel Holdings Limited (GSHL) to which it was sold in controversial circumstances in May 2007, the multi-billion dollar Ajaokuta Steel Company, has another chance to get back into business. Last week, solid minerals development minister, Kayode Fayemi, announced that both the Federal Government and GSHL had forged a renegotiated concession agreement under which the ownership of the steel complex reverts to the Federal Government while the concessionaires, GSHL retain the ownership of the ore producing company – the Nigerian Iron Ore Mining Company (NIOMCO), at Itakpe.
Considering that the arbitral proceedings have been on for the whole of the last eight years, it is no doubt a major step forward for the two parties. One only needs to recall the bitter recriminations and bad faith exhibited at the initial stage of the botched agreement to appreciate the import of the agreement which in every respect now looks a win-win. By freeing the steel complex of all encumbrances, the nation is not only offered the opportunity for a fresh start, its aspirations in steel production are once again revived. On the other hand, an Iron Ore Mining Company in the hand of GSHL, in addition to its bountiful rewards, keeps the nation’s dream of backward integration alive.
We hope both parties have learnt their lessons, the most important of which is the need for fidelity to the letters and spirit of negotiated agreement. If we may remind both parties of the reason why the initial agreement was botched; for GSHL it was on account of its failure to adhere strictly to the terms of that initial agreement; while for the Federal Government, it was the sloppy crafting by unpatriotic officials that handed the Federal Government the wishy-washy agreement that left Nigeria with the short end of the stick.
Today, we have a new agreement in place with two goals in sight: to bring NIOMCO to full function and to get a new operator to take over the steel complex. Those goals must remain in sight no matter the odds.
Unfortunately, setting out worthy goals has proven to be the easier part – if the nation’s experiences are anything to go by. Indeed, Nigerians ought to be forgiven for growing weary of putting too much premium on them after seeing promises failing so soon after the high-octane affairs of putting pens on paper. Nigerians need to see concrete evidence that things will be different this time around. Considering the whopping $4.6 billion already sunk into the complex in the last 37 years, it is the least that the nation deserves.
To realise the nation’s steel dreams, the road ahead, though long and arduous, calls for discipline. At this time, we can only advise the Federal Government to be wary of the shenanigans of bureaucrats; a group so adept at conflating their self-interests with the national interest, even if that risks stalling high priority projects interminably.
Above all, it seems to us an inescapable part of the current demands for transparency that the Federal Government should want to make public the agreement between it and GSHL. That would allow Nigerians know the various milestones set out against their timelines to enable them judge whether or not progress is being made. The same would of course apply to the concessionaire for Ajaokuta Steel whenever the process is finalised. Given that time is of the essence, our expectation is that the Federal Government will immediately put in place a credible process to pick the operator for the steel complex. It’s probably the last chance for the nation to get it right.
