The recent audit report that not less than $652 million or N200 billion will be required to reactive and complete the Ajaokuta steel complex should be of interest to the Federal Government. According to the audit which was conducted between February and April 2018 by Nigerian engineers and Ukrainian experts, the plant had reached 95.7 per cent completion. The audit report, said to be an updated version of an earlier technical evaluation conducted in 2010, has been submitted to the Federal Government by the Sole Administrator of the Company, Mr. Sumaila Abdul-Akaba.
It is, however, not clear whether the audit report is part of the technical audit which the Federal Government engaged the services of PricewaterhouseCoopers on the Ajaokuta steel plant to review the company’s indebtedness and statutory liabilities as part of the settlement agreement with the firms whose concessions were revoked.
However, it is disheartening that the Ajaokuta steel plant has been dogged by maladministration and change of technical partnerships. The avoidable policy shifts have inherently stalled its completion after gulping billions of dollars. Last year, the House of Representatives resisted the proposal of the Federal Government to sell the steel plant to private-sector investors. It urged the government to complete the plant because of its huge benefits to the industrial development of the country. On its part, the Senate last year approved $1billion (N306 billion) for the completion of the steel plant. According to the Senate, the amount should be spent from the government’s share of the Excess Crude Account (ECA).
We are aware that many issues, including funding and disagreements between the government and the legislature have largely contributed to the non-completion of the project. But the multiplier effects the project will have on the economy when it comes on stream are compelling enough to necessitate its completion. With over $8billion reportedly invested in the plant since it started about forty years ago, it makes economic sense to resolve all issues hampering its completion. Anything short of that will amount to a waste of money. Abandoning it is not an option as this will defeat the aim of establishing the plant.
The non-completion of the Ajaokuta steel plant remains one of the grievous mistakes of successive administrations in the country. Unfortunately, none of them has demonstrated enough political will to see the project through. It is also unpalatable that the present administration has been stonewalling on its commitment to complete the plant. We also do not buy government’s argument that “since the Ajaokuta Steel is an inherited challenge from Olusegun Obasanjo’s administration,” its completion should not be the priority of the present administration. Since government is a continuum, it should look at the latest audit report and ensure that the steel project is completed. No doubt, the Ajaokuta steel plant holds great promise for the industrialisation of the country.
Between 2003 and 2016, the steel plant had gone through many concession deals and reversals. The Obasanjo administration concessioned the steel plant to SOLGAS Energy for ten years in 2003. A year later, the contract was terminated on grounds of non-performance. Another concession was 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 to the Federal Government and Global Infrastructure Steel, Nigeria Ltd. The uncoordinated deals have gravely hampered the completion of the steel complex.
It is sad that the Ajaokuta steel plant passed through these challenges because of undue politicisation. Therefore, it is time to set aside political differences and ensure that the multi-billion dollar project is completed forthwith. The steel plant has the capacity to create jobs, diversify the economy and generate so much revenue.
The Federal Government should renew its commitment to complete the project and return the country to the path of industrialisation. The Ajaokuta steel plant is a major plank to achieving this goal. We also believe that the idea of concessioning the project at this stage is unnecessary
