Completing the Ajaokuta Steel Complex – Guardian

What looks like a renewed determination by the Federal Government to complete the abandoned multi-billion dollar Ajaokuta Steel Complex is heartening if the authorities are sincere about revamping the complex which was conceived as a critical element for Nigeria’s industrialisation. That initial dream now appears lost, as political intrigues, greed, corruption and policy somersaults, among others, have combined to keep the complex comatose for the past 30 years.

It is not clear to what extent the present move would bring about the desired change and restore the lost dream but the ball is in the court of President Goodluck Jonathan to prove his mettle as far as the Ajaokuta Steel Complex is concerned. He should prove that he is serious about steel development and industrialization as there can be no serious industrial development in Nigeria without a vibrant and functional steel mill industry.

The Executive Director, Centre for Automotive Design and Development (CADD), Zaria, Fidelis Achive, had recently, at a workshop in Nnewi, Anambra State, disclosed that the Federal Government is now working out modalities to complete the Ajaokuta Steel Complex (AJASCO), within the shortest possible time, to help boost automotive local component manufacturing in the country. Noting that the project has reached about 90 per cent completion, Archive said when completed and operational, raw materials would be sourced from the complex to meet quality and quantity standards required by local manufacturers of automotive components.

He observed that with the launch of the Nigerian Automotive Industrial Development Policy (NAIDP), vehicle makers have started establishing manufacturing plants in the country. Indeed, component parts in form of completely knocked down parts (CKD) and semi knocked down parts (SKD), used for vehicles were supplied from the home countries of vehicle manufacturers for assembly operations in Nigeria. Some N1.3 trillion was reportedly spent in 2012 alone on the importation of iron and steel from other countries. That, indeed, represents a huge drain on the economy, which the country could plug with Ajaokuta.

The Ajaokuta Steel Complex is a metaphor for the failures that define Nigeria in different spheres. Begun by the Shehu Shagari administration in 1980 to provide a basis for industrial revolution in the country, the complex has ever since faced daunting challenges that have practically truncated the initial plan. Every successive administration has cashed in on Ajaokuta and played politics with it and left it forlorn. There has been no serious move to untangle the project from avoidable administrative and management strictures imposed by different Nigerian government officials at one time or the other for selfish reasons.

Consequently, any plan of completing the project now requires going back to the drawing board to conform to the original plan. Complying with the original project plan is essential and the industrialization policy, which Ajaokuta was set to pursue should be the main focus. The need to produce steel in the country was conceived at independence in 1960. However, nothing was done in that regard until late 1979, when the Olusegun Obasanjo-led military government signed the contract with Ukrainians for the construction of the Ajaokuta Steel plant. The actual implementation was, however, started by the Shagari administration in 1980.

There are claims that by 1983, when the rolling mills and some shops of the steel complex were commissioned, the project had achieved 95 per cent completion. The four rolling mills had been completed namely – light section, billets, wire rod medium section and structural mills. These were envisaged to provide the funds needed to complete the remaining five per cent of blast furnace. Reports say the project had cost the Federal Government an estimated $20 billion since it was commissioned.

Unfortunately, Ajaokuta Mill was stalled, as government officials, especially, during the military regimes, were bogged down with the international politics between the Western powers and the Soviet Union (who got the contract), on the viability and desirability of having an integrated steel in a Third World country. With the disintegration of the Soviet Union in 1991, the West led by the United States of America and Britain, increased their opposition to the project through the World Bank and International Monetary Fund (IMF). Ever since then, all efforts by successive governments to complete and operationalise the plant have failed to yield any good result.

In 2004, former President Olusegun Obasanjo’s administration concessioned the plant to Global Infrastructure Holdings Limited (GIHL) of India but like the earlier concession to Solgas, this failed. A fatal face-off between the workers and GIHL in 2007 led to the cancellation of the agreement by the Umaru Yar’Adua administration.

Following the cancellation, GIHL took the Federal Government to a Court of Arbitration in London, where the case and the fortunes of the plant are held down. The move in 2011, by then Minister of Mines and Steel Development, Diezani Alison-Madueke, to complete the remaining sections of the plant with the provision of N650 million failed as her successor, Musa Sada, abandoned the plan based on the failure of government to provide what he called a “business plan” on how to utilise the money. He argued that “government cannot just throw money away like that.” That was somehow patriotic but as Minister, it is unknown why Sada did not take up the challenge of developing the necessary business plan?

Suffice to say that the ugly state of the Ajaokuta Steel Complex remains a huge embarrassment to Nigeria. The ambitious project, when fully operational, has the capacity to generate some 15,000 direct employment and thousands of employment from activities related to the company. Should President Jonathan muster the will to revive the Ajaokuta steel plant, he would not only have set Nigeria on the path of industrialisation, he would also have given some meaning to his transformation agenda.

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