Despite the billions of dollars sunk into the Ajaokuta Steel Plant by successive administrations in the country, it is pathetic that the project is yet to commence operation 42 years after its establishment. Unfortunately, Ajaokuta will likely go down in history as another failed Nigerian project, in spite of its potential to create more jobs, enhance our Gross Domestic Product (GDP) and launch the country into the orbit of industrialised nations.
Over N20billion has been spent on the project in the last six years without achieving the expected results. According to the Budget Office of the Federation, N20.4 billion was allocated to the company from 2016 to 2021 for presumably work not done. Of this sum, recurrent expenditure gulped N18.7billion, while capital expenditure was given N1.4billion. Available statistics showed that in 2016, a total of N295.1million was allocated with N135.2 million released in October of that year, N4.3billion allocated in 2017 with recurrent expenditure of N3.9billion and capital expenditure at N354billion. Personnel cost was put at N3.8billion, while total overhead cost was N75.3 million.
Similarly, in 2018, allocation made to the idle steel plant was N4.3billion, with recurrent expenditure gulping N3.9billion and capital expenditure N354million, while total overhead cost was put at N75.3million. Funds reportedly budgeted for power maintenance was N106.3 million, provision of water facilities N196.5million. Also, between 2019 and 2020, salaries, wages took N2.5billion and N3.7bilion. Out of this amount, N1.8 million was for refreshments and meals. The total allocation to the project in 2021 was N4.2billion, with recurrent expenditure at N4billion, while N253.9million was earmarked for capital expenditure.
Based on the foregoing, it is astonishing that the steel company, which reached 98 per cent completion since 1994, is yet to start operation in any of the 40 of its 43 plants. Not quite long ago, the country witnessed with excitement the inauguration of the Presidential Project Implementation Team that would revamp the steel project based on the agreement with the Russian government. The head of the team and the Secretary to the Government of the Federation (SGF), Boss Mustapha, last year, admitted that previous attempts to revive the plant designed to accelerate Nigeria’s industrial development, led to avoidable massive foreign exchange losses.
In 2019, President Muhammadu Buhari ordered the completion of the steel complex. And last year, the Senate passed a resolution, urging the Federal Government to complete the steel complex. Unfortunately, it was not completed and there is no hope that it will soon be completed. The bleak future of the project notwithstanding, the Minister of Mines and Steel Development, Olamilekan Adegbite, recently expressed optimism that the plant will come on stream before President Buhari leaves office in 2023. Equally, the Minister of Science, Technology and Innovation, Dr. Ogbonnaya Onu, has given the same assurance.
However, time is fast running out to meet that promise. The plan to resuscitate the Ajaokuta Steel Complex came after the bilateral discussions at the Russian-African Summit in Sochi, Russia. Meanwhile, preliminary works have reportedly commenced to determine parameters for effective take-off of rehabilitation works at the plant. It is not clear how much the present effort to revive the steel plant will cost. In 2019, an internal technical audit conducted by a team of Nigerian engineers and Ukraine experts on the project revealed that the sum of $652million would be required to reactivate and complete the project.
According to the audit, which was conducted between February and April 2018, it was reported then that the plant had reached 95.7 per cent completion.
Between 2003 and 2016, the steel plant had gone through many concession deals and reversals, including the one between the Olusegun Obasanjo administration and Messrs SOLGAS Energy, USA, on a 10-year tenure and another given to Global Infrastructure Steel (Nigeria Ltd), which the Umaru Yar’Adua administration revoked. The case went to the London Court of Arbitration. Its resolution led to the modified agreement in 2016 which ceded the steel plant back to the Federal Government, and Global Infrastructure Steel, Nigeria Ltd. The uncoordinated deals might have badly affected the completion of the steel complex.
While undue politisation of the steel project must have hampered its completion, we urge the Presidential Project Implementation Team to see it through.
