Hope for Ajaokuta steel? – The Nation

  • Nothing must derail the plan this time around

The Federal Government last week kicked off the process of resuscitating the 44-year old Ajaokuta Steel Complex with the inauguration of the Ajaokuta Presidential Project and Implementation Team (APPIT), by Secretary to the Government of the Federation, SGF, Boss Mustapha.

President Muhammadu Buhari had, during his visit to Russia in October 2019 secured a commitment from his Russian counterpart, Vladimir Putin, to get the plant – originally designed and built by the Russian Steel Company, TyazhpromExport – completed on a government-to-government framework agreement.

Among others, the APPIT would engage in all negotiations on behalf of the Federal Government that would “culminate in the execution of the …agreement with funding from the Afrexim Bank and the Russian Export Centre”.

The committee is also expected to provide “all relevant technical and other inputs necessary to close the negotiations, including ensuring that the best extreme possible, all relevant raw materials are sourced locally, bearing in mind the local content pro-visions and the Presidential Executive Order 005; and to ensure the resuscitation of plant was based on the original design, while keeping a tab on timely commissioning of the plant within a reasonable period to be agreed upon by the parties to the agreement, and recommend primary tenure of a build, operate, transfer (BOT) concession.

Much as we commend this latest move by the Federal Government to get the steel plant back on stream, it is also noteworthy that this would not be the first time the Buhari administration or even the National Assembly would take steps to actualise the Ajaokuta dream.

Earlier in the administration’s first term, the then minister in charge, Kayode Fayemi, had sought a public-private arrangement of sorts – to ensure its completion. The initiative, unfortunately, barely got off the drawing board.

Convinced that this was not the way to go, the Eighth National Assembly came up with the Ajaokuta Steel Company Completion Fund Bill setting aside $1 billion from the Excess Crude Account for its completion, only to have the bill vetoed by President Buhari on the grounds that it was not “the best strategic option for Nigeria at this time of budgetary constraints”.

Seen from that background, this latest ‘deal’ under which Afrexim is expected to put in $1 billion and the Russians $460 million is supposed to be a breakthrough of sorts.

Nigerians, no doubt, want the steel project completed without further delay. Here, we note that nothing in the statements by the two leaders suggest that any firm ‘agreement’ has been made.

Rather, what is in the public sphere is a statement of intention, the finer details of which still needs to be worked out into concrete agreement by the two parties –the reason the committee was inaugurated.

Unfortunately, this is the point where things often go awry with our officials acting, either downright negligent in drafting the relevant agreements or, betraying shocking proclivities to sell the country for cheap.

The nebulous 2004 agreement under which Global Infrastructure Holdings was handed a 10-year concession by the Obasanjo administration to run both the Ajaokuta Steel Company and the National Iron Ore Mining Company is still fresh in memory.

Among sundry charges, the company was accused by the succeeding Umaru Yar’Adua administration of “assets stripping”, “failing to submit a workable business plan” and “borrowing $192m from Nigerian banks while pledging Ajaokuta as collateral” as a result of which the agreement was rescinded.

We urge the committee to put the country’s interest first as it sets out on the assignment.

A successful completion of the project at this time will not only launch the nation on the path of diversification which has remained hitherto elusive, it would be a significant step in our quest for industrialisation.

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