Ajaokuta: Beyond the minister’s trip to China
The Minister of Steel, Mr Shuaibu Abubakar-Audu, grabbed the headlines of multimedia platforms in the country with sumptuous reports from his eight-day trip to China in January 2024, to canvass for foreign investment for the Ajaokuta Steel Complex in Kogi State. The seeming breakthrough constitutes a deal with a private steel company in China, the Lu’an Steel Holding Group, which promised to establish a steel plant in Nigeria and use a unit of the Ajaokuta Steel Plant to produce hardware for the Nigerian military.
The minister explained the outcome of the visit as follows: “We were in China on the 1st of January 2024. We were there till the 8th of January and met with the Lu’an Steel Holding Group, which is one of the largest steel companies in China; one of the top 20 steel companies in China. They produce about 20 million metric tons of steel per annum. We had very meaningful discussions with them and they agreed and made a commitment to set up a new steel plant in Nigeria where thousands of jobs would be created. They would invest billions of dollars in Foreign Direct Investments (FDI) in Nigeria.”
From the minister’s statements, no concrete deal has been reached with the private company. There is hardly any data on the kind of steel plant that will be established and where; it is not clear how much the Chinese would be investing under the new arrangement, as the idea of ‘billions of dollars’ is like the proverbial bird in the air, which cannot be counted yet. In the same manner, the hope of creating ‘thousands of jobs’ for Nigerian youths does not answer the questions: how many jobs, and in what areas? In a nutshell, the minister’s trip to China has not generated any hope-raising agreement from China.
Moreso, the idea of another private company, this time around from China, taking over Ajaokuta, is more like a broken record, which sings the same lyric over and over again. Nigeria and Ajaokuta have travelled that road before over the last two decades, ending at the cul-de-sac where the steel plant was raped again and again, and dispossessed of a lot of resources. With Ajaokuta’s previous experiences with private firms, which came as messiahs but were unable to make any impact, a better deal with China should be a bilateral agreement with the Chinese government, not just one of the top 20 steel companies in China. A bilateral agreement could guarantee capital inflow and a commitment to the revival of Ajaokuta at the highest levels of the leadership in both Nigeria and China. That will be more reliable than a private company.
The task before the minister is enormous, but it requires a thorough homework. Mr Abubakar-Audu must step into the mud, establish a firm grasp of the steel factory, before seeking help from abroad. Over the years, the idea that the steel complex has been completed up to 90 per cent has been in circulation. It, therefore, presupposes that the plant could be revived and put to use within a little time and effort, while further negotiations on its completion and even expansion for a new steel plant are underway.
Previous reporting by this newspaper indicates that with minimal efforts, sections of Ajaokuta like Light Section and Bar Mill; Wire Rod Mill; Billet Mill; 110 MW Thermal Power Plant; and Lime Calcination Plant, among others, could be put to effective use for diverse services to private and public organisations, without the intervention of any Chinese company.
There is even an option of unbundling the steel plant to ensure optimal performance of each of the sections. We encourage the minister to engage in measures that will activate them in the next six months to one year; and revive the complex before setting out to bring in foreign investors who could bring in facilities that will enable the plant to produce flat sheets for Nigerian and international industries.
The minister’s adventure to China is just like that of his predecessor, Architect Olamilekan Adegbite, who attended bilateral and multilateral meetings abroad, raised hopes that the Russian government and some international financial organisations had put down $2 billion for the revival of Ajaokuta Steel Complex. After eight years, the foreign travels did not add any value to the moribund steel complex. While we wish the minister all the best in this legacy-leaving task, we hope Nigerians are not being taken on yet another fanciful ride on Ajaokuta.