Ajaokuta Steel and DFID-sponsored report
Recently, the United Kingdom Department For International Development (DFID)'s evaluation purportedly described the economic viability of steel production at Ajaokuta Steel Company (ASCO) as marginal. The damning appraisal by the Nigeria Infrastructure Advisory Facility (NIAF), a DFID- funded programme, according to a media publication, recommended that the Federal Government should avert a commercial risk exposure by an out-and-out closure of ASCO on the ground that it is not economically viable.
However, there has been widespread condemnation since this flawed assessment as contained in the DFID-sponsored report was made public. In fact, the torrent of criticisms that greeted the said evaluation and advice to the federal government clearly showed how much value Nigerians attach to steel development.
To many, the report has further substantiated the claim that some elements within the country are working with external forces to frustrate the completion of the ASCO/National Iron Ore Mining Company (NIOMCO), Itakpe in Kogi State. They want the status quo to remain, probably because of what they are benefitting from our inability to ensure a functional and vibrant steel industry.
Vice Chairman, Senate Committee on Niger Delta Affairs, Nurudeen Abatemi-Usman was one of those who wasted no time in giving a very heavy knock to the report. The Senator, who seems to have become a frontline campaigner for the advancement of the steel sector in Nigeria, said he was never surprised by the self-styled recommendation from the foreign body against the actualization of the ASCO/NIOMCO project, describing the assessment as absolutely wrong, misleading and baseless.
Abatemi-Usman, representing Kogi Central Senatorial District, said it was a known fact that there are outside forces, working in collaboration with some selfish individuals within the country, against the full operation of the twin companies located in his constituency.
His words: “The fact is that we have always known that they are not interested in seeing the economic growth and development of our country. Even the World Bank/IMF has never encouraged the advancement of the steel industry in third world countries, including Nigeria. So, we cannot be surprised by this erroneous assessment and irrational advice coming from the DFID sponsored NIAF team, said to be made up of three economists and a Meteorologist, people who have no single idea of what steel development is all about.”
Calling on the federal government not to heed such ill-advice, the lawmaker said, “How could anyone say that a project that is capable of creating over two million jobs directly and indirectly is not economically viable. The steel industry if properly developed in Nigeria can conveniently rival the oil sector in terms of revenue generation. It can transform our country from being a monolithic economy that is totally dependent on oil. We will not relent in our effort to see that the dream of Nigerians come true as we continue to pursue vigorously the completion of the Ajaokuta Steel Complex for the benefit of our people and the country at large. We will not be put off by the external forces that are trying to discourage our government on the project. The government must know that vision 20:2020 can never be achieved without a solid industrial base that is anchored on steel development.”
In an internal analysis of the NIAF evaluation, the Ministry of Mines and Steel Development was quoted as saying that “NIAF team only visited ASCO and Nigerian Iron Ore Mining Company for less than 10 hours, yet they came up with such resounding condemnation of the projects... The economics of producing steel at Ajaokuta said to be likely marginal is based solely on immediate commercial considerations without taking into cognizance other advantages such as technological acquisition, multiplier effects (downstream and upstream), national security, national pride, socio-economic importance, etc. In addition, potential markets for the bye products offer great prospect for profit.”
Workers in the iron and steel sector of the country equally could not hide their feelings of anger over the report, suggesting the closure of Ajaokuta Steel Complex. The workers spoke through their unions, under the aegis of Iron and Steel Senior Staff Association of Nigeria (ISSSAN), and Steel and Engineering Workers Union of Nigeria (SEWUN). They appealed to the Federal Government not to pay attention to any recommendation whatsoever asking it to dump the ASCO/NIOMCO project.
Describing those demanding for the shutdown of Ajaokuta Steel Mill as evil, egoistic and unpatriotic, as well as “agents of the World bank and Paris Club”, the employees noted that both firms hold vast potentials for the economy of Nigeria and that of the entire African continent. Addressing newsmen, ISSSAN National President, Salihu Otori, pointed out that the argument being propounded by the agents of advanced economies is simply to dissuade us to pave way for their continuous economic growth and technological development to our own disadvantage.
In like manner, President of Nigeria Mining and Geoscientists Society (NMGS), Akin George, said any plan by the federal government to scrap Ajaokuta Steel plant project in line with the recommendation of the NIAF team report would be robustly resisted. The NMGS boss contended that winding up ASCO would see the government acting against its industrialization programme.
He said: “There is no nation that can survive without industrialization and the steel sector is at the heart of that. Scrapping the project is unacceptable to us because you cannot throw away the baby with the bath water. The project is about 98 percent completed and scrapping is colonial mentality. They want us to continue to depend on them for our steel needs and the government is backing them. China has no raw material for steel, yet they are one of the leading steel producing countries in the world.”
For Attah Achimugu, Chairman/Chief Executive Officer of Reprom Nigeria Limited, with adequate funding, the Ajaokuta steel plant can work efficiently. Attah, an expert in steel matters, said contrary to the thinking in some quarters, the plant was not obsolete. According to him, it is technically sound to handle steel production. He disclosed that a steel plant in Ukraine, over 105 years old is still working with minimal maintenance.
Achimugu argued that “What Ajaokuta steel required was digitization which could be completed in 10 months.” He noted that all parameters of an integrated steel plant was complete at ASCO, stressing that the issue of the steel company lacking economic viability does not arise at all.
On his part, the newly appointed Sole Administrator of Ajaokuta Steel, Engr. Joseph Isah, revealed that the blast furnace mode used in steel production adopted by the company is the best technology of steel fabrication all over the world.
Arguing against the assertion that the company is using outmoded technology, Isah, a seasoned metallurgical engineer with over 30 years experience in the steel industry, told journalists that over 74% of steel production globally was via the blast furnace. He maintained that the blast furnace was the finest given the volume and quality of steel to be manufactured in the plant, while urging Nigerians to take no notice of the insinuations in some quarters that the plant was not working.
According to him, the recent technical audit of the plant by the Ukrainians, indicates that the steel plant was in good form and set for operation, if the needed funds are being provided. Quoting from the Ukrainians' report, the ASCO chief said: “the situation of the steel plant's equipment and facilities are satisfactory. Mechanically, the steel plant equipment and facilities are generally in good condition.”
The Sole Administrator noted that President Goodluck Jonathan was fully committed to the early completion and operation of the Ajaokuta Steel Complex, hence, his directive for the quick settlement of the arbitration against the company by Global Infrastructural Holdings Limited (GIHL), an Indian firm.
Dismissing the rumour that Ajaokuta Steel project was about to be dumped, the Minister of Mines and Steel Development, Arch. Mohammed Sada assured that the federal government would complete it for the commencement of full operation, while stressing that Nigeria's effort towards industrialization will not be thwarted by any foreign or local interest.
Hear him: “The first and most important thing to ask is, who prepared the report? How well equipped are they with the knowledge to assess that facility? My stand is that for a facility like that, we have a vision to industrialise, and we have to pay a price to achieve that, and one of the prices we have to pay is to continue to overcome problems that arise from those facilities. This is the way to industrialisation. As far as I am concerned, our resolve to complete ASCO and NIOMP will not be truncated. To this effect, the President approved the change of the management teams of the organisations.”
Michael Jegede, a journalist wrote from Abuja