A global output of steel production and it economic impacts cannot be over emphasise. Reasons been that the world we live today has shown to us that,pragmatism in the use of natural endowment. Is the best bet to economic development and growth.
Here we are talking about the Steel and Iron Ore exploration and production. This form of natural endowment is a blessing many pragmatic nations have taken advantage of it availability on there soil. With shared technology that is either local or foreign. Alongside, good management and transparency in its accrued generated revenues.They have deployed to expand and grow there economy.
We can’t even talk about steel without making references to the multiplier effects on all sectors of the economy
Such as the industrial, agriculture, transport and construction sectors, among others. While its values chains bring in the production of Automobile, Rail tracks, Military hardware, Information Communication Technology (ICT) hardwares, Aviation equipment and tools, Electronics, Electricals, Medicals equipment etc,.
Nigeria is one of the nations on the face of the earth endowed with several minerals resources solid or liquored. And one of such is iron ore and steel materials.
But a cursory look at exploration and mining of these abundant resources to the benefits of citizens. Is as if a curse is placed on the nation and her citizens never to enjoy the blessings of natural resources. The happening around crude oil that has been in exploration for the past five decades and mainstay of our economy is a reminder of “resource curse”.
Nevertheless, our concerned in this pieces is about Steel,and our focus critically is on the recent Federal Executive Council (FEC) announcing the approval of N853 million concession consultant for Ajaokuta Steel and National Iron Ore Mining Complex in Itakpe, Kogi State.
This news took us aback and one just have to imagine this is not happening again. When Nigeria’s peers having steel production complex like ours are making billions of dollars from its.
With a benefits of hindsight, the Ajaokuta Integrated Steel plant foundation stone was laid in 1980. Under the Shehu Shagari government that envisaged it as the bedrock that would served Nigeria’s industrialisation and compliment crude oil revenues from foreign exchange earnings.
Conversely, after 44-years and 90 percent completion in 1983 with four different types of Rolling Mills Plant. As well as work stations and production units that include, wire rod mill; light section mill; medium section and structural mill; power plant; machine and tool shop; lime calcination plant; electrical repair shop; mechanical repair shop; and quality assurance section.
Built by TyazhpromExport a Russian company. This gigantic national asset remain moribund with nothing to show as steel products, and massive investment of the nations wealth.
Ironically, South Korea, is earning over $60bn per annum and her steel company employed closed to 70,000 of her citizens and others.Sadly, the Ajaokuta Steel Rolling Mill Plant and that of South Korea were constructed at the same period. In a recent report by the World Steel Association (WSA). China occupies the number one position with the world’s largest steel production to topped the chart with 808.4m tons. Interestingly, this fit represent about 50 per cent of global steel output. Serious, fellow African countries like South Africa is reported to be producing 6.1m tons 22nd position and Egypt 5m tons of steel, 27th position.
Instructively, beyond the positions they occupied on the chart,steel is prominent in this countries industrialisation, mass employment, foreign exchange earnings, and dynamic economic opportunities. Regreatably, here in Nigeria,we are playing ping pong with Ajaokuta through the politics of concession upon concessions. In retrospect, this concession things dated to 2003 with PDP government under President Olusegun Obasanjo. Attempt to revamp the Nigeria economy with Neo-liberal prescription of privatization and all sorts.
Ajaokuta steel was one of the casualty of failed market fundamentalist economic reform. Although Messrs SOLGAS ENERGY of the USA won a 10-year concession tenure.That however ended in August 2004, as the government terminated the agreement due to non-performance. This was followed by concessioning of the same Ajaokuta steel to Global Steel Holding an Indian firm for a period of 10 years. This one too end abrubtly as Global Steel Holding did not perform as expected but went into asset stripping leading to goverment terminating the agreement. The whole nations was however embarrassed by the legal roadblock to Ajaokuta operation.
The questions that comes to minds is.Why are we such a visionless nation? After investing a whoopng $10 billion that is about N4.155 trillion on this critical asset.This huge national asset steel plant designed to produce 1.3 million tons of liquid steel per annum in phase one. And with a built-in capacity to expand its production to 2.6 million tons of flat iron and steel products in its second phase. As well as 5.2million at it phase three expansion. Alongside various types of steel products, thst includes heavy plates. In addition,,the Ajaokuta steel is said to be having 43 different plants of which 40 are already completed and can produce independently.
Our pain! The Buhari APC government never learn any thing from previous concessions of pass administrations. Neither get inspiration from what fellow African countries are doing with steel. Even with the laudable prospects of Ajaokuta steel complex. The only thing they see to do is another concession consultancy services of N853 millions to CPCS Transform Consortium. As “Transaction Advisors” for Ajaokuta Steel Company Limited and National Iron Ore Mining Complex Itakpe.
What is to done as way foreward. First, the concession must be work through by eliminating all forms of corruption and any things that may result in legal entanglements. Secondly, the Nigeria state must not give out Ajaokuta steel out to private firm alone,goverment must have serious stake in it management.
Lastly, the government both present and passed has failed us. It time to demostrate actions and business like on national asset that represent commanding height of our economy.
All this we belive would help in the realization of our prospects and potential of steel economic to our national life and more.
Adefolarin A Olamilekan,
Political Economist and Development,
Email:[email protected]
Tel:08107407870,08073814436
