Time to make Ajaokuta Steel Complex functional

The Federal Government’s recent announcement of plans to revive the moribund Ajaokuta Steel Company is a welcome development. However, words must be matched with action.

It is unimaginable that at this age and time, Nigeria is still importing slabs, roofing sheets and simple agricultural tools such as hoes, cutlasses and glassware from other developing countries, thus enriching other countries. This has to stop if the country must attain its target as an industrial giant.

Minister of mines and steel development, Olamilekan Adegbite, had at a ministerial media briefing held in Abuja in April said government would engage a British firm to complete the work started by a Russian firm in 1968.

What is required in reviving the Ajaokuta plant is adequate funding and maintenance. Nigeria may want to borrow a leaf from the steel plant in Ukraine that is over 105 years old and still working perfectly with minimal maintenance

While we would not want to be drawn to the merit or otherwise of selecting the company, we would rather advise that the best hand should be engaged to ensure that the complex is put to use as quickly as possible and save the country billions of naira in foreign exchange spent annually importing steel products into the country.

That our dear country Nigeria is blessed with abundant human and material resources will only be stating the obvious. But that we have as a nation failed to make effective and efficient use of this divine gift is very unfortunate but true.

And one area that we have been found wanting is in the development of steel industry in which the requisite raw materials are ubiquitous.

Obviously, Nigeria is blessed with all the major raw materials needed for the production of iron and steel including 3 billion tons of iron ore, 3 billion tons of coal and limestone in excess of 700 million tons and 187 billion SCF of natural gas. This figure is against the projected annual per capita consumption of iron and steel in Nigeria, which stood at 130kg in 2015.

Planning for the Nigerian steel sector started way back in 1968. But 50 years after, the country is yet to establish a viable iron and steel sector despite huge investment of over $ 7 billion. The Ajaokuta Steel Company (ASC) failed to take off while Delta Steel Company (DSC) and the three government-owned inland/satellite rolling mills in Oshogbo, Jos and Kastina are moribund, working under low capacity utilization.

The reasons for the poor performance of the Nigerian steel sector include: inadequate funding, poor planning and implementation and political influences.

Until recently, the nation’s steel requirement was met since independence by imports from Western nations, particularly US, Great Britain, Germany, Japan and by the relatively cheap and sub-standard steel from some Asian nations.

As a result, Nigeria is now spending a large portion of her foreign exchange for the importation of steel products, while still investing heavily in the domestic production of steel. This is certainly a case of double jeopardy.

The privatization that was carried out in 2004 – 2005 failed to revive the sector. Rather, it merely transformed the companies to private monopolies. Reason being that the two integrated iron and steel companies in Nigeria (ASC and DSC) were unable to produce billets for the 20 steel rolling mills in the country.

Over the years, so much had been said about resuscitating the moribund Ajaokuta Steel Rolling Mill (ASRM), but little has been done in terms of giving the place a human face. The steel is still comatose despite the fact that about $7 billion has been sunk into the plant since 1979, in a bid to get it up and running.

Therefore, it is high time the Federal Government summoned the political will and determination to get the plant back on its feet.

Typical of every Nigerian project, Ajaokuta’s state shares the same fate with the country called Nigeria – unstable and shaky with an unpleasant history.

Read also: Stakeholders urge FG to revive moribund steel rolling mills

That is not all. The project has also become a money guzzler with nothing to show for the huge expenditure. For instance, under the Jonathan administration, the Federal Government set aside N3.921 billion in the 2014 budget for the salaries of the idle workers and other recurrent expenditure at the Ajaokuta Steel Rolling Mill. A total of N4.58 billion was budgeted for the workers in 2012.

Right now over $1 billion is said to be needed to bring the plant back on stream.

There is equally the absence of auxiliary support infrastructure for the complex. These include functional rail track between its premises and the seaport for conveyance of needed raw materials and finished products.

If put to use the steel complex has the potential to generate 15,000 direct employment, even as 500,000 Nigerians could also be indirectly engaged. In this era of insecurity, agitation for secession and other social vices confronting the nation, making the company functional will be a way of solving some of our social problems.

What is required in reviving the Ajaokuta plant is adequate funding and maintenance. Nigeria may want to borrow a leaf from the steel plant in Ukraine that is over 105 years old and still working perfectly with minimal maintenance. This Ukaranian example is worth emulating if we are serious about the twin issues of industrialization and manufacturing.

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