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Ajaokuta Steel: An abandoned national treasure

All over the world, steel development is believed to be an essentially fundamental component to enhance economic growth. This is why many countries, including third world nations, have continued to do everything possible to ensure the sustenance of their steel sector. The case in Nigeria is evidently different. We seem to have closed our eyes to the numerous benefits derivable from having a sound and robust steel sector. Successive governments, for instance, have abandoned the Ajaokuta steel project, not minding its strategic role to the industrialization of our great country, and the significant growth and development it can bring to the economy.

In October 2002, Secretary-General of African Iron and Steel Association (AISA), Dr. Mohammed Sanusi, an expert on iron and steel matters, had in a paper observed that, “To industrialize, there is the need to have a sound industrial base. This will provide the solid foundation on which the industrial super-structure will be built. This industrial base is nothing other than a well-developed iron and steel industry that will be producing such critical industrial raw materials as: Cast iron (different categories); Rods and bars (both high tensile and mild steel varieties); Wires (in all its ramifications); Structural steels (light, medium and heavy structural); Flat sheet steels (plain and galvanized, and also the entire spectrum classified as flats); Stainless and other special alloy steels; Rails and pipes; Plates (various sizes in width and thickness)”.

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For Dr. Sanusi, it is only governments that could provide the initial developmental funds in view of the high capital costs and the long gestation period of steel projects. This, he noted, is the trend worldwide where all pioneer steel industries and accompanying infrastructures of any nation are public-owned.

“A few examples will suffice, thus; India, South Korea, Pakistan, Egypt, Iran, Iraq, Algeria, Libya, Turkey, Venezuela, Indonesia, Singapore, Malaysia and Mexico. The steel projects in all these countries started as serious national projects, with their Governments taking active interest in the steel development.”

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In Nigeria, we have continued to depend solely on crude oil and refused to diversify our economy. Even though we have other numerous natural resources at our disposal, we choose to remain a monolithic economy with strong dependence on the oil sector. This obsession, as it were, has made our economy to be susceptible to external manipulation and negatively affects the planning horizons in the country.

With an estimated $7 billion already engulfed by the Ajaokuta Steel Company since the contract for the project was awarded in 1979, and about $650 million required for it to become fully operational, enlightened Nigerians, have contended in different fora that it would make much sense for it to be completed. Minister of National Planning, Shamsudeen Usman, for instance, had in the course of his ministerial screening on the floor of the Senate last year wept for Nigeria on what has become of the largest integrated steel company in West Africa. The minister lamented that in spite of the huge amount of money expended on the scheme, there was nothing on ground to show for it.

According to data provided by the World Steel Association (WSA), the total world crude steel production in 2010 was 1,413.6 million metric tonnes. China, which is presently the largest steel producing country in the world, accounted for 626.7 mmt (44.3%) of world steel production in 2010. Nigeria is not on the WSA 2010 list of 40 countries ranked on the basis of steel production volume, which showed that Venezuela the least produced 2.2 mmt. Irrefutably, Nigeria would have been among the top 10 countries in terms of steel production, if only we had properly harnessed the great potentials in our steel industry, and our economy would have been better for it.

There is no gainsaying the fact that the economic wellbeing of Nigeria would be enhanced to a large extent if there is the willpower on the part of government to make Ajaokuta Steel come to life. The project if completed is said to have the capacity to engage over two million Nigerians directly and indirectly.

Nigeria’s unemployment rate increased to 23.9 percent in 2011 compared with 21.1 percent in 2010 and 19.7 percent in 2009 as revealed by the National Bureau of Statistics (NBS) in January this year. 23.9% of our population of over 160 million is about 38 million. Do we therefore need to be told that it will be a worthwhile investment to complete the abandoned ASCO/NIOMCO project?

President Goodluck Jonathan, during his electioneering campaign rally in 2011 in Lokoja, Kogi State, clearly agreed with the position of many Nigerians when he said: “One thing that is dear to Nigerians is the Ajaokuta Steel Complex and until we revive that complex, we cannot talk about Vision 20:2020. This is because for you to play big globally, you must industrialize and for you to industrialize you must produce steel. The Ajaokuta complex must be revived.”

With this comments of Mr. President, it is expected that by now he would have marched his words with action. But we really have not seen much in that regard. In the 2012 and 2013 appropriation bill, nothing was allocated for capital budget in ASCO and NIOMCO, except for the infinitesimally paltry N50 million for both companies in 2012 and N47.34 million in the 2013 budget which is still before the National Assembly for consideration.

Our federal legislators should use their power to make provisions for a substantial amount of money for the project in their ongoing scrutiny of the 2013 budget proposal presented to them by the President before its passage.

Jegede, a media practitioner, wrote in from Abuja.


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