Indigenise Ajaokuta Steel To Resuscitate, Boost Profitability – Expert

The group managing director of KAM Holding Ltd, an iron and steel manufacturing company located in Ilorin, Kwara State, Dr Kamoru Yusuf has offered suggestions on the best way to resuscitate the Ajaokuta Steel Company.

Kamoru spoke exclusively with LEADERSHIP in Ilorin, Kwara State.

Explaining that no foreign investors can bring Ajaokuta Steel Company back to operation, the industrialist said:” What the federal government needs to do is to adopt the model used by the Peoples Republic of China which later transformed the country’s steel industry within 25 years which led to massive development of the industrial sector in China.

“What the Chinese Government did was to indigenise one of the country’s major industries – the iron and steel, into the hands of their people with the government holding only 25 percent interest while local investors were allowed to own 75 per cent stake.”

He said that Chinese government’s decision created opportunities for the local investors and ensured that the wealth remained within China, without repatriation of capital as well as dividends; thereby leading to development of local skills and other multiplier effects that finally resulted in what the world is witnessing today as the industrial explosion in China.

He added: “ I urge Nigerian government to redirect its policy on the industry because haven expended close to 40 years experimenting a particular model without result, it should be clear and in fact obvious that the commercial interest of the offshore investors does not match the developmental interest of the government of Nigeria as well as the industrial aspiration of her citizens.

“With my over 30 years’ experience in the iron and steel business, I can confidently provide a workable template, which of course could also show that no foreign investor can fix Ajaokuta Steel Company.

“Any attempt to invite foreign investor(s) to resuscitate the Ajaokuta Steel Company will result in the said foreign interest depriving us of our national heritage; as any proceed realized from the sales, will be repatriated by such interests to their countries and would consequently have negative effects on government’s policy of backward integration and the corresponding objective of conserving the scarce foreign exchange with dire consequences on the current and future wellbeing of our economy.”

Yusuf submitted that it is only indigenous investors that can bring Ajaokuta Steel Company back to life and ensure that the proceeds therefrom remain in Nigeria, “and we can re-invest this into the economy. This we have all seen, was the case in the cement industry and with Nigeria now taking another giant stride in refinery and petrochemicals.

He also pointed out that the developed nations of the World are always at the forefront of periodic review and monitoring of progress and challenges facing the iron and steel sector by mandating their financial institutions to provide adequate support to the industry.

On challenges facing the steel sector in Nigeria, Yusuf said:” For more than two decades, government had not paid the desired attention to the steel sector which is the primary basis for industrial growth and development of any nation.

“Steel sector plays similar role as that of cement, sugar, fertilizer and petrochemical industries; all of which can provide the needed tripod-support for the development of other light industries in the country. The incremental and progressive results being witnessed by them was the outcome of the success story of the indigenous players in the cement industry over the past nine years and with reduced stake from the offshore investors.

“ The best model, is to indigenise and empower Nigerians and ensure that the strategy as encapsulated in the Nigeria Industrialisation Revolution Plan (NIRP), creates avenues for whosoever wishes to partner with the local giants who have verifiable track record in the industry to do so.

“ Iron and steel sector is suffering as a result of what is happening to Ajaokuta Steel Company. For an industry that is driven by committed and persevering investors who are putting national interest as paramount in their business decisions, what government needs to do in the immediate circumstance is to mandate commercial banks and development banks through the Central Bank of Nigeria (CBN) to focus and direct attention to giving adequate support to the steel industry due to the capital-intensive nature of the business.”