Yet another deal on Ajaokuta steel complex?

Conflicting signals over what to do with the comatose Ajaokuta Steel Mill is unhealthy. Government appears to be at sea again over what to do or how to save the huge investment on the landmark project upon which Nigeria’s industrialisation is hinged.

We cannot remain a wasteful nation. There has to be a way to reposition the country on the path of economic development, progress and prosperity.
The failure of Ajaokuta has been a huge embarrassment. Government should waste no further time to decide on what to do to salvage the Steel Complex. In late 2018, reports emerged that the Federal Government was ready to offer the Ajaokuta Steel Mill for sale under its privatisation programme, which was greeted with mixed reactions, as previous privatisations have not proved to be useful and beneficial. We told them then to sell the firm outright through privatisation.

While that was still undecided, reports have emerged that the same Federal Government is making moves to resuscitate the steel plant. It is not clear why the seeming indecision on Ajaokuta. And it is not that there are new developments to justify the new move. Nothing has really changed as far as the Steel Mill is concerned. Why do new ministers have different ideas on how to promote what has become a scam?

Why then, we may ask, is the government procrastinating on a project that has lingered for over three decades without adding any value to national development or the economy?

Our position on Ajaokuta has not changed.  Government should privatise the Steel Plant, if that would turn its fortunes around for it to contribute to the national economy. The failure of the previous privatizations is not without reasons. We dare say that the failure was due to the poor manner by which the facilities were privatised.

There was no due diligence on the buyers before parting with the facilities. The Bureau of Public Enterprises (BPE), which has the responsibility for sale the assets, did not do its work well. Or so it now seems.

There appears to be no clear terms and conditions of sale. Cronyism, favouritism and political patronage were uppermost in selling the assets rather than ability to deliver. That is why the privatized facilities have not been performing.

It is paradoxical, for instance, that government, after privatising the Power Holding Company of Nigeria (PHCN), turned around to advance huge funds to the buyers. The privatised assets would have performed if the buyers were genuine independent investors, who are capable and have enough financial muscle to forge ahead.

Therefore, we insist that the Ajaokuta steel plant should be sold to investors who have the capacity to turn around the plant. Other than that, it is wasteful for government to pump huge funds again on Ajaokuta in the name of resuscitating it. Corruption would scuttle the effort. Besides, government is a bad manager, as can be seen in the unproductive refineries.

The Director-General of the BPE, Alex Okoh, who gave the hint of the new deal, said that government had commenced moves to resolve the on-going legal tussles between the Federal Government and Global Infrastructure Nigeria Limited (GINL).

He said that the Federal Government was desirous to see the Ajaokuta Steel Complex completed and made operational, and thus, solicited the support of the National Assembly, Management of Ajaokuta Steel Company and other stakeholders in achieving the goal.

It is curious that the new deal team noted that the status of the steel plant was not as dilapidated as generally assumed, but that the plant was rather in a reasonably operational state. The same team has been visiting after a cabinet inauguration.

It is also strange that the Federal Ministry of Mines and Steel Development that has always been at the centre of new deals has given approval for the conduct of the comprehensive technical audit by Ajaokuta Steel Company engineers, technologists, technicians, craftsmen and other associated professionals, assisted by two Ukrainian consultants and two engineers assigned by the President of the Nigerian Society of Engineers.

It is good enough that the Steel plant is reported to be in satisfactory condition, which makes it marketable.

In the main, we would like to note that before the Ajaokuta Steel Mill is privatised, government should ensure that the buyers have enough capacity to complete the project and make it functional. This is the only way the glimmer of hope on it as the foundation of industrialization and entrepreneurship in Nigeria is not dashed again.