…Minister requests $2bn for Ajaokuta Steel
The Joint National Assembly Committee on Steel Development has raised concerns over irregularities identified in the Ministry of Steel Development’s 2024 budget appraisal during its defense of the 2025 budget before lawmakers on Friday.
Zainab Gimba, the co-chairman of the committee highlighted issues, including allocations for unspecified “capacity-building programs” and “skills training initiatives,” which lacked evidence of execution or impact.
She noted that these allocations risk being labeled as “ghost projects” designed to divert public funds.
She said, “A first-hand appraisal of the 2024 submissions shows budget infractions, such as funds allocated for programs that lack clear documentation of execution.
“Administrative and recurrent costs significantly increased without corresponding improvements in ministry activities or outputs.
“This raises questions about mismanagement or misallocation of funds.”
Gimba added that several projects, especially those related to Ajaokuta Steel, violated the Fiscal Responsibility Act, which mandates efficient resource utilization and accountability.
Read also: Senate committee vows to revive Ajaokuta steel plant
Citing breaches of the Public Procurement Act, she pointed to instances of non-competitive bidding and inflated contract costs.
“There are ghost projects, a direct violation of Nigeria’s Financial Regulations, which require expenditures to be backed by documentation and outcomes,” she stressed, recommending a forensic audit to be conducted by independent auditors on 2024 expenditures and contracts.
On the Ministry’s 2025 budget, Gimba expressed dissatisfaction with the allocation of 57.2% of funds to personnel costs, stating it left only 34.6% for capital expenditure, which is inadequate for the steel sector’s modernization needs.
She noted the absence of detailed plans for strategic investments like feasibility studies, stakeholder engagement, and infrastructure modernization.
“Our committee is displeased with the Ministry’s consistent communication failures and lack of sufficient information provided during budget defenses,” Gimba said.
“If the legislature fails to rigorously scrutinize budgets, government accountability is undermined. We will enforce our statutory powers to ensure compliance.”
Patrick Ndubueze, the Committee Chairman echoed his colleague’s concerns, emphasizing the need for a robust steel sector to drive Nigeria’s industrial growth.
“Nigeria can’t progress without a solid steel industry. We need to prioritize capital investments over salaries. Repeating past mistakes is unacceptable,” he said.
Lawmakers also questioned plans for a fresh technical audit of Ajaokuta Steel despite three previous audit reports.
They expressed skepticism about the necessity of a new audit and demanded clarity on why the existing reports had not been implemented.
Read also: Senate queries N4.2bn personnel cost for ‘unverifiable workers’ at Ajaokuta Steel
Abubakar Audu, the Minister of the Ministry of Steel Development, defended the decision, stating that the previous reports, over a decade old, were conducted by different companies and did not reflect current realities.
According to him, the Federal Government had in October last year, signed a Memorandum of Understanding (MoU) with Russia for the completion of the plant and the National Iron Ore Mining Company (NIOMCO), both located in Kogi State.
He said. “The tripartite MoU was signed in Moscow with Messrs, Tyazhpromexport (TPE), the Russian firm that originally built the Ajaokuta steel plant and partners of the consortium, Novostal M and Proforce Manufacturing Limited.”
According to Audu, the consortium, in company with Nigerian engineers, will conduct a fresh technical audit, a report of which will be submitted to the Federal Executive Council (FEC) for approval before work on the plant begins fully.
Audu said, “$2bn, about N3.7tn, is required to revamp Ajaokuta steel. The ministry does not have the money. Our budget for 2024 was just N24bn, a far cry from that amount. So, we are sourcing for partners.
“We are in the process of conducting a (technical) audit of the entire firm for submission to FEC for approval”, he told the lawmakers.”
However, his submission elicited questions from lawmakers, who particularly doubted the relevance of a fresh technical audit when the government could simply dust up any of three existing previous audit reports and act on it.
A member of the Committee, Natasha Akpoti-Uduaghan asked, “You haven’t conducted the technical audit, yet you have already arrived at a cost of $2bn. How did you get the figure before completing the audit?
“We have three existing reports on previous audits carried out on Ajaokuta Steel. Why can’t we implement the existing reports?
“Why do we always sign new ones?”
Responding, the minister said the existing audits date back 10 years ago and were done by other companies, not the Russians.
He said, “The reports will have to be bankable; we are involved with new partners, separate from those who worked on the existing reports.
“The previous audits are about 10 years old. But, we will build on them to come up with what is tenable with present realities,” Audu said.
He reassured the members that the government had faith in the Russians to be equipped enough to play a pivotal role in the efforts to complete the plant.
He also promised that the ministry would address all the concerns raised by the panel on the performance of its 2024 budget and the projections for 2025.
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