Business Hilights
Tracking Nigeria's Headline Business News Online

Irony: Nigeria imports $3.3b steel products yearly, can’t complete Ajaokuta with $1.21bn

The revelation of the Minister of State for Mines and Steel Development, Abubakar Bwari, at the recent 16th Mines and Money in London, that Nigeria imports $3.3 billion worth of steel and associated derivatives yearly, has continued to raise concerns amongst development economists.
This is more so, when stakeholders have made it clear that the completion of age long Ajaokuta Steel Complex in Kogi State and even the National Iron Ore Mining Company in Itakpe only need about $1.21bn to begin rolling out of formed iron and steel.
Bwari told participants at the summit that “we needed 17 million tons, but local production of the products was mere 2.2 million per annum,” saying the iron and steel sector offers opportunities for foreign investors and no industrialisation could take place in the absence of the endowments.
Though he revealed that the federal government had awarded N15 billion contracts to five firms for the exploration of choice minerals like gold, lead, zinc, iron ore and rare earth metals, he was mute on what government is currently doing to revive the moribund national assets at Ajaokuta and Itakpe.
In her recent petition to the National Assembly, a human right activist and lawyer, Ms Natasha Akpoti recalled that Ajaokuta Steel Company Limited in Kogi state Nigeria, remains the second largest in Africa and 12th largest iron ore in the world has not only been under lock and key, but has remained a big centre for massive looting and wastage of the nation’s resources.
The federal government has spent over $8bn on the nearly moribund steel plant since its inception, the bulk which has been largely expended on the salary of workers of the company who have been idle since the Russians abandoned the construction of the gigantic venture in 1994.
Her petition unearthed plots by some individuals in former Goodluck Jonathan’s administration and even the incumbent Muhammadu Buhari’s administration to fraudulently acquire the steel company for themselves.
In her speech, Natasha revealed how a Russian company had to abandon the project in 1994 because Nigeria fell short of its contractual agreement by not releasing funds needed for the completion of the steel company.

Ajokuta steel complex
Admin building at Ajaokuta Steel Complex

Natasha also claimed that Russian former president, Vladimir Putin wrote the Nigerian government on how to modernize and complete the Ajaokuta complex, but key Nigerian actors have been silent on the offer because of their personal interest in the steel company.
The petitioner further hinted on how Ajaokuta and another Iron Ore Company, Itakpe were concessioned to a private company, Global Infrastructure Holding Limited, which later metamorphosed to Global Infrastructure Nigeria Limited. According to her, GINL had at many times contributed to the decay of the steel company, which is why the steel company is still moribund today.
While alleging that former Minister of Solid Minerals and current Governor of Ekiti State, Dr kayoed Fayemi and Governor of Kogi State, Yahaya Bello have interest in the steel company, she claimed that before resigning as minister, Fayemi was close to ensuring that GINL, again gets control of the steel companies.
However, the National Assembly leadership and many Nigerians have rejected any other form of privatization but want government to release the needed $1.21bn to complete the scheme so that the yearly capital flight of $3.3bn for importation of iron and steel will be internalized.
Experts queried the rationale in importing what nature has given Nigeria in commercial quantity.
Already, investigations showed that if completed, Ajaokuta is capable of generating up to 75,000 direct jobs and one million indirect jobs and this would to a great extent reduce the rate of unemployment in the country. At least, 10,000 jobs are expected to be employed in the complex.
The steel company is also expected to produce about 5.2 million tonnes of steel annually, a quantity which is able to push the country into the league of big steel production companies.