Ajaokuta Steel Company Remains Burning National Issue

Ajaokuta Steel Company Remains Burning National Issue

Again, the nation’s steel sector was the butt of attention recently when President Muhammadu Buhari told journalists on his recent visit to Kogi State that the Federal Government under his watch has made good the legal encumbrances hampering the take-off of the nation’s behemoth steel complex.

Buhar, told a bewildered audience that all the legal hurdles have been scaled and that the nation was on a scale to become the continent’s largest steel producer. It is not the first time Nigerians would be greeted with such stupendous acclaim.   

Before the recent pronouncement, the Nigerian government had announced that 11 companies had indicated interest to take over Ajaokuta Steel Company on a concession basis.

Three of the 11 bidders are Russian companies, the Minister of Mines and Steel Development, Olamilekan , said recently in Abuja while listing his ministry’s achievements.

The steel company, located in Kogi State, was built by the Soviets between 1979 and the mid-1990s but has never produced steel as the project was never completed. It was also mismanaged.

In September, the Nigerian government agreed to pay $496 million to settle an Indian firm’s claim over Ajaokuta steel.

The dispute followed the Federal Government’s revocation in 2008 of an agreement that handed control of the steelworks and the National Iron Ore Mining Company to Global Steel Holdings Limited, an Indian firm. In cancelling the deal, the Umar Yar’Adua administration said the terms of the concession at the time were not favourable to the country.

“One of the major albatross on Ajaokuta was the concession that occurred under President Olusegun Obasanjo to Messrs Global Steel Industries”, Mr Adegbite said recently. “Things went sour and they took us to court. The court case went on for about 12 years, but thanks to a patriotic Nigerian lawyer in the UK who handled the case very effectively”.

He said the COVID-19 pandemic deterred the current government’s plan to make Ajaokuta steel company functional before the end of 2022.

 “As of today, the process is on. In 2019, I had promised that Ajaokuta Steel would start operations before we leave office. That is not possible anymore; not because of lack of effort but, especially because of COVID-19. We started the process in October 2019, when we went to Sochi, Russia, to attend a summit with Mr President”, he said.

“On the sidelines of a bilateral meeting, we met with the Russian government, led by President Vladimir Putin and President Muhammadu Buhari and we requested, among other things, that they should help us to resuscitate Ajaokuta Steel because the Soviets built steel company and they acceded to that request.

“I came back to Nigeria and explained our plans to resuscitate Ajaokuta steel and we will make sure it works.

“The first thing we were to do was the technical audit; ascertain what was wrong, what needed to be done, what needed to be serviced and all that. That was what the technical audit was meant for”, Mr Adegbite said.

He said the COVID-19 pandemic deterred the current government’s plan to make Ajaokuta steel company functional before the end of 2022.

AljazirahNigeria agrees that the government is not going be the first to show the way on to revamp of the steel plant neither is it walking a fresh terrain. Many governments have made moves seemingly plausible to put the plant on stream. Those promises fell on false hopes and the plants are still not rumbling to a start.

We call on private stakeholders to join in the arduous task of salvaging Ajaokuta for the nation.

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