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Nigeria Needs $1.425bn To Complete Ajaokuta Steel

Nigeria requires a total of $1.425 billion to complete and provide external infrastructure for the operation of the Ajaokuta Steel Company, according to Ismaila Akaaba, the sole administrator.

Incidentally, members of the House of Representatives were unanimous in their rejection of moves to concession the facility.

The lawmakers also rejected the claim by Abubakar Bawa Bwari, the acting Minister of Mines and Steel Development, that Nigeria lacked local engineering capacity to run the company.

Speaking at a public investigation hearing on the planned concessioning of Ajaokuta Steel Complex and the need to complete the remaining two percent that would make it operational, the sole administrator said $625 million would be required to complete the steel company based on the technical audit conducted.

While disclosing that the report of the audit was ready for presentation to the president next week, Akaaba also told lawmakers that another $800 million would be required to provide external infrastructure for the complex.

Asked if Ajaokuta was a going concern or a dead enterprise, Akaaba said: “Ajaokuta is a viable project, the machinery is of the highest quality.”

He added: “The facility requires replacement of parts which were not installed. And I think Nigeria now has the political will to start Ajaokuta; we don’t have a choice.”

Asked if Nigeria had the local capacity to run Ajaokuta, contrary to the view expressed by the minister that Nigerian engineers lacked the capacity to run the facility, the administrator said: “Yes. Some we have, some we don’t have”.

Responding to questions by the committee chairman and House Leader, Femi Gbajabiamila, regarding the benefits of Ajaokuta, the chief executive said the complex required 10,000 technical staff to start at inception, adding that “that’s not part of administrative and other personnel.”

The minister had earlier told the panel that the ministry didn’t make any provision for the completion of Ajaokuta Steel because government didn’t want to commit more funds that would go down the drain as was in the past. Bwari told lawmakers that “Ajaokuta is a leaking pipe”.

Gbajabiamila had asked why Ajaokuta, given the concern expressed by the minister with respect to its current state, would not attract any provision for completion of the remaining two percent.

“It would have been more sensible for government to complete it before concessioning or sale,” he said.

The minister, in his response, said government was made to understand that $8 billion had gone into the company with no result due to corruption and mismanagement.

“Even if the two percent was completed today, government could still not operate it because there are no Nigerians to run it,” the minister said.

Irked by the minister’s assertions, lawmakers descended on him, expressing disappointment that the Buhari-led administration was not mustering enough political will to rescue Nigeria from foreign dependence in steel importation.

They urged the president to carry out an on-the-spot assessment of Ajaokuta to see things for himself before taking the decision to either sell, concession, or complete the remaining two percent.

This position arose from the ministry’s argument that only concessioning would save government money and guarantee effective management of the facility.

To this end, Gbajabiamila reminded the minister, Bwari, that the House and, by extension, the National Assembly has removed Ajaokuta from the list of government assets to be privatised, adding that until investigation proved otherwise, nobody should tinker with the idea of handing Ajaokuta over to any group.

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