Is FG’S pro­posed con­ces­sion of Ajaokuta Steel Com­plex the right choice?

The Punch - - VOX POP -

Ican­not feign ig­no­rance over what is hap­pen­ing in the coun­try to­day re­gard­ing Ajaokuta Steel. It is cor­rect that con­ces­sion may be the way for­ward but what is es­sen­tially er­ro­neous with the re­cent devel­op­ment is the plan to give it to a com­pany called GINL. I was priv­i­leged to know that GINL once got a gar­nishee or­der against the Nige­rian Na­tional Petroleum Cor­po­ra­tion and the or­der broke down a lot of op­er­a­tions in the NNPC be­cause it couldn’t pay a lot of its sub­sidiaries and ven­dors off­shore. So, our re­la­tion­ship with GINL has not been rosy. So, why should we go back to the same GINL? It is some­thing I sim­ply do not un­der­stand. I re­spect the po­si­tion of the cur­rent min­is­ter and I wouldn’t like to crit­i­cise him, but I don’t see any rea­son why it should be GINL. The gov­ern­ment should or­gan­ise an open bid and it should be very com­pet­i­tive which will get the at­ten­tion of the world. Look at what is go­ing on in Amer­ica to­day with Pres­i­dent Don­ald Trump and steel devel­op­ment. It shows that re­gard­less of how much you crit­i­cise Trump, you must ad­mit that he has done the right thing by pro­tect­ing the Amer­i­can steel in­dus­try and shield­ing the sec­tor. That is the way I ex­pect our coun­try to also shield our na­tional as­sets. It is a huge in­fra­struc­ture. The idea of Ajaokuta Steel was con­ceived in the 1970s but up till to­day, Nige­ria has yet to ad­here to changes and flu­id­ity of tech­no­log­i­cal changes. That is where I ex­pect Ajaokuta to be. It is sup­posed to have ad­vanced with the times. Even the De­fence In­dus­tries Cor­po­ra­tion of Nige­ria got its steel from there. Rolls Royce got steel from there to build en­gine ca­pac­ity which is the world­wide-ac­claimed lux­ury salon car. So, I ex­pect Nige­ria to pro­tect the steel in­dus­try but GINL has been go­ing in and out for many years. Con­ces­sion is good but it doesn’t have to be GNL. I hear $8bn has been spent on Ajaokuta since in­cep­tion but the money was not meant for in­fra­struc­ture alone. It was also meant for salary, main­te­nance, op­er­a­tions and train­ing of staff and pay­ment of ex­pa­tri­ates. But re­ally, we have been mis­led. I think with the devel­op­ment to­day and the his­tory of events in steel devel­op­ment both in Ajaokuta, Itakpe and Delta, you will re­alise that we must be proac­tive in our en­gage­ment. It must not be busi­ness as usual. Iron­i­cally, the $8bn we claim to have wasted was ex­pended dur­ing con­ces­sion.

CON­CES­SION of the Ajaokuta Steel Com­plex is the right thing to do for now. A con­ces­sion agree­ment is a kind of ne­go­ti­ated con­tract be­tween a gov­ern­ment and a com­pany whereby the lat­ter is given the right to op­er­ate a busi­ness un­der cer­tain con­di­tions.

The busi­ness may be in mul­ti­ple stages and the com­pany is al­lowed to op­er­ate a part of or the whole busi­ness.

Such a sit­u­a­tion oc­curs when the cap­i­tal out­lay is huge and the gov­ern­ment can­not af­ford it or re­quires tech­ni­cal ex­per­tise that is not lo­cally avail­able.

The Ajaokuta steel com­pany has these two prob­lems, apart from hav­ing served as con­duit for cor­rup­tive ac­tiv­i­ties over the years. The project started in the 1970s with huge funds in­vested in it and up till now, it has not taken off.

With con­ces­sion, Nige­ria will not be in­vest­ing a kobo. It is the en­tre­pre­neur who will gen­er­ate the funds and in­vest it ju­di­ciously and in a timely man­ner for prof­itabil­ity.

Many Nige­ri­ans will be en­gaged at every stage of the pro­cesses to ac­tu­alise the pro­duc­tion of steel which has eluded the coun­try for over 30 years.

When pro­duc­tion fi­nally com­mences, the coun­try will achieve the fol­low­ing: Be­come a steel pro­ducer which would have hap­pened long ago; gen­er­ate mas­sive em­ploy­ment; and re­duce im­por­ta­tion of steel and steel prod­ucts which will re­duce for­eign ex­change spent yearly on such im­ports. It will also un­leash a new phase of in­dus­tri­al­i­sa­tion in the ar­eas of ve­hi­cle man­u­fac­tur­ing, home ap­pli­ances, roads and gen­eral com­mer­cial con­struc­tion ac­tiv­i­ties as well as gen­er­ate pro­duc­tive ac­tiv­i­ties in the steel and al­lied in­dus­tries. The most im­por­tant aspect is that the agree­ment must be drafted in the in­ter­est of the na­tion’s present and fu­ture gen­er­a­tions and not for per­sonal or in­di­vid­ual ben­e­fits. We must also do away with the bu­reau­cratic bot­tle­necks which marred ear­lier ex­er­cises. There is no need for fur­ther de­lay in go­ing ahead with this project if the gov­ern­ment is de­sirous of eco­nomic di­ver­si­fi­ca­tion through in­dus­tri­al­i­sa­tion to com­ple­ment the cur­rent agri­cul­tural revo­lu­tion.

The Fed­eral Gov­ern­ment should work with the pri­vate sec­tor to re­vive the com­plex and make it prof­itable be­cause this will help the coun­try to gen­er­ate ad­di­tional rev­enue. Apart from the nu­mer­ous em­ploy­ment op­por­tu­ni­ties, it will en­sure that we no longer im­port steel into this coun­try. Ajaokuta Steel Com­plex can serve as an al­ter­na­tive to oil in this coun­try, it will also help us to gen­er­ate ad­di­tional for­eign ex­change. I am of the opin­ion that this gov­ern­ment should do what­ever it takes to re­vive this com­plex and nur­ture it to pro­duc­tiv­ity. The cur­rent min­is­ter should work as­sid­u­ously and en­sure that he re­solves all out­stand­ing is­sues in or­der to bring it back to life in the in­ter­est of this na­tion and its peo­ple.

THE truth is that there has been so much talk about that com­plex by the gov­ern­ment and in the end, you wouldn’t know what they are do­ing. Nige­ria has a suf­fi­cient num­ber of ex­perts and pro­fes­sion­als who can look at that mas­sive na­tional as­set and come up with work­able so­lu­tions on how to re­vive it. It is af­ter a de­tailed study of that fa­cil­ity that a sound re­port can be given on whether or not to con­ces­sion it. It is af­ter this that we will know whether it should be de­vel­oped with­out opt­ing for a con­ces­sion ar­range­ment. This is be­cause there is no way to carry out in­fras­truc­tural devel­op­ment in a coun­try with­out the use of steel. My take is that be­fore we con­ces­sion that fa­cil­ity, let us take a sec­ond look at it and ask our­selves what to do in or­der to make it work. I say this be­cause that com­plex has not worked for once and this is not right, con­sid­er­ing the mas­sive in­vest­ment in that fa­cil­ity. Or does it mean that it can­not work at all? Or are they say­ing it is only when we con­ces­sion it that it can work? There should be a study and the find­ings should be made pub­lic and then we can say based on the re­sult of the study, we may or may not con­ces­sion it. And if we are to con­ces­sion, what are the terms? These are is­sues that should be looked at in or­der to pro­mote trans­parency and ac­count­abil­ity. So, let them make us know the true po­si­tion of that steel com­pany be­fore telling us that they want to con­ces­sion it.

IT may be the right choice in the cir­cum­stance. If you ask those in gov­ern­ment to go ahead and re­vive the com­plex, they will tell you they don’t have the money to do it. They may give other rea­sons. If those in gov­ern­ment want to con­ces­sion, they should get ex­perts who have Nige­ria’s in­ter­ests at heart; peo­ple who are ready to in­clude con­di­tions that will en­sure that whoso­ever wins the bid does not cheat our na­tion. Con­ces­sion may bring life to that ed­i­fice but there must be con­di­tions which should be at­tached be­fore the agree­ment is signed. These con­di­tions should be such that will as­sist gov­ern­ment and the pub­lic achieve the aim for which the com­plex was es­tab­lished. Con­ces­sion could bring in in­vestors and open up the econ­omy just as we, in KWACCIMA want to do in Kwara State as we pre­pare for the forth­com­ing 7th Kwara Trade Fair be­tween March and April this year. Over 3,000 in­vestors, ex­hibitors and par­tic­i­pants are ex­pected at this event which we hope will at­tract in­dus­tri­al­ists from across the globe to tap into the op­por­tu­ni­ties avail­able in this state. Such could be the ad­van­tage of this con­ces­sion. The essence of giv­ing out such a com­plex out on con­ces­sion is to rev­o­lu­tionise the steel in­dus­try and we stand to ben­e­fit from if in the long run if it is prop­erly han­dled.

•Prof. Sher­iffdeen Tella (Depart­ment of Eco­nomics, Olabisi On­a­banjo Univer­sity, Ago Iwoye, Ogun State)

•Chief De­mola Seriki (A for­mer Min­is­ter of Mines and Steel Devel­op­ment)

•Mr. Bashir Oladipo (Ex-le­gal Ad­viser to Kwara State Cham­ber of Com­merce, In­dus­try and Mines)

Dr Sam Nzekwe (A for­mer Pres­i­dent, As­so­ci­a­tion of Na­tional Ac­coun­tants of Nige­ria)

•Mr. God­win Eo­hoi (Reg­is­trar, Char­tered In­sti­tute of Fi­nance and Con­trol of Nige­ria)

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