by John Ukaobasi
President Mohammadu Buhari recently affirmed his determination to diversify the Nigerian economy by approving the revival of the Ajaokuta steel rolling mill abandoned for over 40 years in its location in Kogi state. The late President Shehu Shagari and Leonid Brezhnev, leader of the old Soviet Union started to build theAjaokuta Steel Rolling mill in 1979 to produce as much as 5mn metric tons of steel a year.The accord to revive the Ajaokuta project was arrived during a meeting between the Nigerian president and Russian President, Vladimir Putin, in Sochi at the Russia- Africa economic summit last year.
At present, the dilapidated steel factory complex has failed to produce a single bar, coil or rod, despite billions of dollars in public funding and multiple ownership changes. The plant reportedly has a 68 kilometer road network, and is meant to accommodate 24 housing estates, a seaport and a 110mw power generation plant. If operational, it could provide nearly a million jobs as the rolling mills the federal government set up in Kastina, Jos , Oshogbo , to processsteel bars from Ajaokuta and Warri into rods will begin production to feed our machines tool factories to produce tool for manufacturing of machines and spare parts . The original builder of the Ajaokuta Steel , Tyazahpromexport , TPE , will soon arrive Nigeria with a 60 – man team to start technical audit of the steel project.
No doubt the engagement of the Russian “Metro prom” in Ajaokuta steel company revitalization would give a tremendous boost to Nigeria’s economic and Industrial development. The company is reportedly a recognized leader in designing projects in metallurgy, supply of equipment, execution of construction and erection of equipment up to reaching the design capacity . The re-launch of the company would truly diversify the Nigerian economy and eventually reduce her steel – dependence on foreign partners.About $1.46billin is expected to be spent to revamp the steel project , the minister of Mines and Steel Development , Olamilekan Adegbite , has said . He affirmed that $1 billion of the money would be coming from the African Export Import Bank (Afreximbank), while the balance would be provided by the Russian Export Centre.
The government must this time try to keep her own aspect of thesteel company resuscitation deal. Work stalled on the Ajaokuta steel project in the first place due to government’s failure to pay thebuilders on schedule
By 2004 , the steel plant was taken over by India’s Ispat Industries Ltd, but the concession was revoked in 2008 and it took Nigeria eight years to come up with a renegotiated concession agreement. Vice president Yemi Osinbajo in 2016 described the saga as ‘atragedy of immense proportion.’
This tragedy must not repeat itself with this new deal. In addition to reviving the Ajaokuta steel project , Adegbite said the federal Government is discussing with state governments to resolve the conflicts on minerals deposits scattered in nearly every state in the country, stating that some governors have misconstrued the existence of the minerals in their domain to mean that they have propriety rights to the revenues accruing from the exports of the minerals. Indeed , due to prolonged litigations, the Aluminum Smelter Company of Nigeria, ALSCON, unarguably one of the largest Aluminum smelting companies ever strategically sited in Africa is yet to resume production . ALSCON is located in south-south Akwa-Ibom State and has a capacity of producing 197,000 tons of Aluminum a year. With proximity of this plant to neighbouringAfrican countries around the Gulf of Guinea like Ghana, Togo, Benin, Cameroon, Equatorial Guinea, Gabon, Sao-Tome, the government making a final decision regarding AlSCON’s ownership and its financial and non-financial assets would create enabling environment for the Nigerian economy and would help to increase her steel market share among the 28 countries in the African continental free trade Area (AFCFTA) .
Really the Federal Government is determined to revive the Ajaokuta steel project which is at the core of Nigeria’s integrated steel development at a time the Boko-haram terrorism is increasingly contracting the Nigerian economy./The Russian weapon and military equipment have proved their value to the armed forces of Nigeria by being successfully used in numerous counter – insurgency and counter-terrorist operations in the North East of Nigeria . Observerssay that Russians due to their commitment to Nigeria are willing tobroaden the range and increase the quantity of military equipment provided to the Nigerian Air force, Navy and Army but certain obstacles mainly bureaucratic needed to be addressed urgently given the importance of security to safeguard the current infrastructural development that would oil the country’s new effort to industrialize.
The government has flagged off the construction of the Nigerian National Petroleum corporation’s (NNPC) $2.8billon Ajaokuta -Kaduna-Kano (AKK) gas pipeline project which will boost domestic natural gas utilization for the country’s economic development . The AKK pipeline expected to be completed within a 24 months’timeline will run from Ajaokuta and traverse, Abuja, Niger, Kaduna and terminate at Kano. President Buhari said the project will provide gas and also facilitate the revival of Nigeria’s moribund steel industry.
For the steel complex to be put to effective use , accordingly to experts , railway is essential for a continuous supply of ore from the remote mines and a seaport would be needed to secure a trouble free shipment of coking coal . Success of this new deal for the nation’s economy would task the Buhari government to overcome the challenges of funding , raw materials development , high cost of energy and natural gas , and inappropriate capital strutures.
Ukaobasi wrote from Minna