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The fresh push for Ajaokuta

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By Emma Ujah, Abuja Bureau Chief

push for Ajaokuta

Forty years after the commencement of the Ajaokuta Steel Complex, in Kogi State, what should have been a game-changer in Nigeria’s industrialization remains a dream till date. Successive Presidential candidates went to Kogi to canvass votes with the the promise to complete the multi-billion dollar project and put it to operation, but each ended abandoning it after winning elections.

The administration of former President Olusegun Obasanjo made two desperate attempts to privatise the complex. First, it was given to Solgas, said to be owned by Nigerians and Americans in a concession arrangement that failed. The Complex was later handed over to Global Infrastructure Nigeria Limited owned by Indians. Rather than completing and operating the company, the Indians were accused of asset-stripping the company. That concession was again terminated by the federal government.

The fresh push by the President Muhammadu Buhari administration could perhaps make a difference if the president and his top government officials demonstrate adequate political will.
The proposed agreement between the federal government and the Russians on the completion and operation of the multi-billion dollar Ajaokuta Steel Complex (ASC) has been in limbo, seven months after the initiative.

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The Russians had upon the visit of President Muhammadu Buhari to Russia in October, last year, pledged to provide $460 million for the completion of the complex.

Africa’s Export-Import Bank (Afreximbank) also pledged another $1billion to enable the company complete all ancillary facilities in the complex to make it operational.
The development signifies what could become an effective end to the over 40-year delay in the completion of the project.

Speaking on the euphoria that greeted the announcement of the deal, last year, the Minister of Mines and Steel Developemnt, Arch. Olamilekan Adegbite told Vanguard in an earlier interview, “It is good that we went to town then, it was something that was worth celebrating.    The President went to Russia with the basket of requests, that was the Russia-African summit in Sochi in October last year. On the sideline of that summit, we had a bilateral with the Russian President.

“One of the requests that was tabled was for the Russians to come back and complete Ajaokuta, minding the fact they built it in the first place, when they were Soviet Union. It was essentially the Russians and the Ukrainians under the Soviet Union- it was big country then, that built Ajaokuta, to about 95- 98 per cent completion.

“The request that we made was, we’ve tried some commercial to complete Ajaokuta avenue in the past which have failed, so now we want to try a government to government arrangement.

And president Putin acceded to that and promised that the Russian government will do that.

“The beauty of it is that we got funding- the Russian Export Centre which is akin to what is called EXIM Bank in other countries pledged a sum of $460 million towards this project, while Afrixim Bank which is the bank that we are also shareholders, also pledged a billion Dollars.

“The beauty of it is that the money is not tied to Nigerian revenue. It is tied to revenue from that company. So Ajaokuta is beholding to pay back the money that is used to complete it. That is why this is a Build-Operate-Transfer. It is the details that we are going to work out. The kind of money it needs to be running. Ajaokuta is such that we do it properly. There’s a business case for that and it can pay for itself.

“That was too good a news to keep to ourselves and that’s why it was celebrated because Ajaokuta is something that is just waiting to catapult us into the industrial era. Nigeria is not industrialised because to produce simple implements, complicated tools, vehicles, aircraft parts you need steel.

“And that’s the problem we have in Nigeria. We have not been able to manufacture those things because we do not have steel.

“We need to produce liquid steel which can now be manipulated into many other things. Once you produce liquid steel, you can do anything you want with it. You can alloy it- that is add some metals because you want to have some benefits from that alloy. You can change it to flat sheets, which of course goes to form other shapes, you can start making body parts for cars. That is why everybody is excited about it.”

However, more than half a year after officials of the two countries agreed to complete the complex and put it to use, the agreement has yet to be signed.

Why agreement not yet signed

Adegbite disclosed that work had been going on between Nigerian experts and their Russian counterparts to with a view to coming up with a mutually beneficial agreement between the two parties.

He said: “A lot of works have been going on. It is not something we can go to the public about. We have set up some local bodies in the ministry with experts from Ajaokuta itself, the ministry, and some people outside who have knowledge about Ajaokuta, including former staff.

“They have been working. We have been exchanging correspondences, technical details, local contents, and all that.

“There is a meeting that is coming up in Cairo, and the Russians and the Nigerian team will meet there. This meeting is to crystallise everything and then we go into the MoU. Once this is done, we will move faster.”

Attempt to smuggle in Metpron

Vanguard investigations revealed that the six-month delay in signing the deal which will put Ajaokuta to work was much more than “just exchanging details,” as some top federal government interests and a state governor attempted to maneuver and takeover ASC from the backdoor using a private Russian firm known as Metpron.

Following the Sochi meeting between President Buhari and his Russian counterpart, Vladimir Putin, a government-to-government arrangement was agreed upon.

However, a cabal who were out to scuttle the new efforts at completing the ASC and putting it to operation, and making it work for the Nigerian economy, secretly brought in Metpron, a private Russian company, into the arrangement, without the knowledge of President Buhari.

As learnt, it became evident to a few other patriotic Nigerians on the trip that something was amiss.

This set of patriots consisted of a handful of technocrats with vast knowledge of government-to-government transactions, as well as, private citizens who have been campaigning for the completion of the multi-billion dollar complex.

The second group queried the choice of Metpron, instead of TyazhpromExport (TPE). It was argued that TPE should be the natural choice since it is owned by the Russian government and the original builders of the complex.

The struggle between these two sets of Nigerians, it was gathered, played a major in the delay in the negotiations that followed the approval for the new deal by the two presidents.
Vanguard learnt that it became a matter of who was closer to President Buhari, members of his kitchen cabinet and was able to convince them on the honesty of their positions.

At last, the President’s inner circle gave the nod for the TPE to be brought in. Consequently, TPE was invited to a scheduled meeting in Cairo, Egypt for negotiations.

It was gathered that the president had to intervene and asked that TPE be brought in, following which the negotiation meeting in Egypt was held in March. It was attended by Nigerian and Russian top government officials, TPE and Africa Export-Import Bank which pledged to provide $1 billion for the completion of the project.

Another thorny issue which had to be resolved was the management of the $1.460 billion pledged by Afreximbank and the Russians.

Some officials, it was learnt, wanted it to be managed by a team in the Office of the Secretary to Government of the Federation or the Federal Ministry of Mines and Steel Development.
However, those who insisted on engaging TPE, again argued that to ensure greater transparency, an Independent Project Implementation Committee (PIC) should be set up to manage the funds, while the Ministry should concentrate on policy issues.

The suggestion was that the PIC should be made up of technocrats from the Presidency, the ministry, experts from the private sector, especially members of the Nigeria Society of Engineers, metallurgists, Miners’ Association and representatives of the host state of Kogi, as well as, Afreximbank which will provide bulk of the funding.

It was gathered that the process of setting up the PIC would have been completed by now, but for the drawback occasioned by the coronavirus pandemic.

It is expected that the inauguration of the Ajaokuta Presidential Project Inauguration Team (APPIT), on May 11, 2020, to help revamp the company in line with the recent agreement reached with Russia to resuscitate the steel company, would accelerate the new push to make Ajaokuta a reality.

The Secretary to the Government of the Federation SGF, Boss Mustapha who chairs the team noted that revamping the plant has become imperative, saying “this is further underscored by difficulties being witnessed with present challenges in the global oil industry.”

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