FOUR DECADES OF WASTE: QUESTION MAR KS OVER THE STEEL MILL THAT KEEPS STEALING MEALS FOR GOVERNMENT OFFICIALS

FOUR DECADES OF WASTE: QUESTION MAR KS OVER THE STEEL MILL THAT KEEPS STEALING MEALS FOR GOVERNMENT OFFICIALS

In every household, at the birth of child, the clergyman who is the equivalent of a Priest is usually contacted to say prayers for the child, usually prayers for success. This prayer is usually said with an air of profound joy and sky-high hopes. This hope is sustained throughout the upbringing of the child in the hope that the child will make it. In some cases, the child grows up to be successful. At other times they do not. But in a very unusual scenario, the child never grows up beyond infancy. This unusual scenario mirrors the Ajaokuta Steel Company perfectly.
AFTER FOUR DECADES: FAILURE, FRUSTRATION AND MISERY
The Ajaokuta Steel Company was an $8 billion investment undertaken by Nigeria under the Federal Military Government of Olusegun Obasanjo and T. Y. Danjuma in 1979. It was originally projected to produce 10 million metric tonnes annually. However, today, the Central Bank of Nigeria, the nation’s apex bank revealed that she currently imports steel and its derivatives to the tune of 25 metric tonnes per annum, totalling $4 billion. In simple terms, Ajaokuta has veered off its designated course. s
Today, like most Nigerian projects that were meant to bring true development to the nation, Ajaokuta has failed in all available indices of evaluation. Instead of being the gear to spearhead Nigeria’s industrialisation drive, it has recoiled to being a spare tyre in the trunk. Today, instead of the projected 10 million metric tonnes, it produces zero metric tonnes of steel annually and its failure has truncated the destinies of many. While conducting his investigations, Kingsley, a motorcycle operator suspected to be in his late fifties or early sixties affirmed to this reporter that he is indeed a graduate — in fact, he had studied metallurgical and material engineering in anticipation of the commencement of the Mill in the early ‘80s. Having lost all hopes of earning a decent living, he resorted to bricklaying, and then motorcycle riding, to eke out a living.
Although Kingsley was unlucky, fortune smiled on Dr. Johnbosco. Dr. Johnbosco, a don in a federal university in the south-west narrated a similar tale to Kingsley’s. However, unlike Kingsley, his results were enough to earn him automatic employment at the university. Wistfully narrating to the reporter, he said “in those days, we were encouraged by government to study the course in anticipation of Ajaokuta’s kick-off. We waited and waited and despite several postponements, Ajaokuta remains aground…” While narrating the promise that Ajaokuta held for him and many others like him, the wistful feeling of what could have been turned his face sour in no time.
But beyond Kingsley and Johnbosco, with no steel production and with budgetary allocations still being made for the company, question marks exist over what these funds are specifically meant for.
AJAOKUTA STEEL MILL: THE DEPENDABLE ATM THAT KEEPS GIVING
Since the Buhari-led government revoked the concession agreements between Nigeria and Global Steeln Holdings, the Indian company that won concessionary rights over the mill, not only has the government shown confusion over its plan for Ajaokuta, questionable budgetary allocations to the company are sufficient to raise eyebrows.
For instance, in the 2019 budget, Nigeria budgeted 3.8 billion Naira for the payment of salaries and allowances and other utilities. Of this N 3.8 billion, N 2.8 billion was earmarked for the payment of salaries while 858 million was budgeted for allowances. However, the Iron and Steel Senior Staff Association of Nigeria (ISSSAN) and Engineering Workers Union of Nigeria (EWUN) both peg the number of staff at the Company at 2,900. According to these two associations, the monthly wage bill is N200 million or N2.4 billion annually, leaving the question of where the remaining N0.4 billion goes. That is, the Federal Government of Nigeria is paying thousands of Nigerians to work in a company that produces nothing. Make of it whaat you would.
Although it is worrying that the government spends this much to pay people to basically produce nothing, other aspects of Ajaokuta’s budget are clouded with a quilt of secrecy. For instance, the 2019 budget pegs the cost of securing ‘office materials/consumables’ at N3.6 million. What kind of office materials are being targeted? No one knows.
On further examination of the budgetary allocations, ‘rehabilitation/repairs of the company’s fixed assets’ is supposed to gulp N145, 483, 574. To the unassuming mind, that is a noble thing to embark upon. However, Salami Jamiu, Chairman of the Nigerian Union of Mines Workers, Ajaokuta Branch, affirmed to the News Agency of Nigeria that contrary to what the public is made to believe, installed equipment are in good working condition. That is, 145 million naira is reserved for the rehabilitation of equipment that have already been deemed good enough.
While Ajaokuta is the ATM that keeps giving, Nigerians continue to bear the brunt. With all our economic indices perpetually in the red, the first step to recovery is to make much of the little we have. And if that little is being siphoned off through obscure and dishonest budgetary habits, we can only sit back and wait for our doomsday — if it has not arrived yet.
BUT WHY IS AJAOKUTA NOT WORKING?
A trip to the Ajaokuta Steel Company is enough to make even a drunk sober. It is perhaps Africa’s — not Nigeria’s — biggest failure. With a road network spanning 68km, over 20 housing estates, 3,500 staff quarters (some already sold by the Federal Government), a power generation plant with a 110mw capacity, and about 42 different plants, the Federal Government designed to make Nigeria self-sufficient in steel production. In 2019, it was estimated by the National Institute of Metallurgical, Mining and Materials Engineers that when fully operational, it is supposed to provide over 600,000 jobs — 100,000 directly and 500,000 indirectly. But the million-dollar question is: despite the benefits that accrue, why does Ajaokuta remain moribund?
Dr. Johnbosco explains that Ajaokuta was built by the Russians with a design that ensured that it got all its inputs in Nigeria. This was supposed to be a positive for the Nigerian economy. However, it remains Ajaokuta’s biggest hinderance till date. Ajaokuta can only function when all, bar none, of its inputs are available in Nigeria.
But then the problem arises. According to Dr. Johnbosco, “To manufacture steel, the plant requires a steady supply of iron ore, coke, and limestone as the ingredients. These ingredients are then mixed in a blast furnace which churns out liquid steel which could be further processed into flat or liquid steel for mechanical work or rail construction respectively. However, once the blast furnace has been put on, it goes on and never shuts down but is fed with raw material in small batches every 10-20 minutes. That is, everything — iron ore, coal, limestone — must be in place for the blast furnace to be put on for the first and final time during its life span.”
He further explains that Nigeria has all required raw materials with huge iron ore deposits in Kogi and coal and limestone in abundance in Enugu. But here the first problem with raw materials surfaces. ‘The two iron ore deposits have fundamental problems, with Agbaja having iron with high phosphate content — which makes it unsuitable as it produces brittle steel — despite possessing billions of tonnes of iron. Itakpe, its better alternative, has iron ores with low iron concentration, hence to make it suitable to produce steel, it must undergo a process known as Beneficiation to raise its iron content.’ He continues.
In addition, Nigerian coal is non-coking, meaning that it is very difficult—if not impossible—to produce coke from it, making it inapplicable in the production of steel. With two of three raw materials already difficult to produce in Nigeria, the steel company is faced with problem number one.
To correct problem number one, the Federal Government instituted the National Iron Ore Mining Company (NIOMCO) in 1987. NIOMCO is a beneficiation plant for Itakpe’s iron with a capacity of 2.15 metric tonnes. Thus, without production from NIOMCO, Ajaokuta cannot function. However, your guess is as good as mine: as at 5th January 2020, and xx years after the construction of NIOMCO and Ajaokuta are in a battle for supremacy in dormancy.
The dormancy of NIOMCO in turn ushers in problem number three. In 1987, the Federal Government first announced that it would be constructing the Itakpe-Warri-Ajaokuta rail to transport iron from Itakpe to the steel mills at Ajaokuta. Thus, all four pre-requisites for Ajaokuta to function are either not operational or not available. And in the near future, the situation is expected to remain so…except the railway which is being constructed by the current administration.
THE WAY FORWARD
Whenever the Nigerian discourse is brought up, the key question which always dominates on the lips of the discussants is: why is Nigeria failing or, in a slightly fatalistic variant, why has Nigeria failed? But more importantly, the question should be: what should be done? To revive the steel industry and put Nigeria back on the path of industrialization, Adegboyega Samuel, an economist with the Economists for Change in Nigeria (ECN), ‘the Federal Government has to leave Ajaokuta immediately and invite private investors to restructure the Company and run it. This is because the amount of money it will cost to fix Ajaokuta is enough to start new smaller production plants.’ “However,” he adds, “before that can be done, government must provide the adequate raw materials — the Itakpe-Ajaokuta rail, beneficiated iron ore, etc or they will have to allow the investors import billet to produce steel.”
One can only hope that with the resumption of work on the Itakpe-Ajaokuta rail, there will be hope for the revival of steel production in Nigeria, the thousands whose ‘jobs’ have sunk in the sea of Ajaokuta’s dormancy, and the quest for industrialisation in Nigeria.


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