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