On Thursday 29 December, 222, then President Muhammadu Buhari revealed that $400m has been spent by his administration to “transform” the Ajaokuta Steel Complex in Kogi State.
He added that the investment will add $1.6bn annual income to Nigeria’s economy and create over 500,000 estimated jobs. Two years after that humongous investment, a mere addition to several that had been made in the past, the steel company is still comatose.
Days ago, the Minister of Steel Development, Shuaibu Audu, requested N35bn funding from financial institutions to revive the moribund Ajaokuta Steel Company. The minister said the collaboration with financial institutions was to seek the best financing options to re-start the light Steel Mill in Ajaokuta and kick-start iron rod production.
But Nigerians are yet to recover from the shock of National Assembly members taking delivery of N160bn worth of Special Utility Vehicles (SUVs) at a time they were asked to tighten their belts and remain patient amidst inflation and gross economic hardship in the country.
Analysts posit that rather than cut the cost of governance, Nigerian politicians appear to prefer living large, spending the scarce resource on luxury, while poor Nigerians make sacrifices by enduring all manner of hardship. Perhaps if the government had been more prudent, there would be more than enough to get Ajaokuta Steel company on its feet.
In his 11 December 2023 article, Frivolous, unclear, wasteful proposals in 2024 federal budget, Eze Onyekpere gave some insights into government expenditure that could have been better utilised.
“The 2024 federal budget provisions have continued the tradition of frivolities, etc. Let us start the analysis from the State House headquarters. The annual routine maintenance of mechanical/electrical installations of the Presidential Villa for N9.2bn leads the way – it is annual and routine and only for mechanical and electrical installations; Julius Berger liabilities on routine maintenance 2022 & 2023 and work as directed 2022-2023 inclusive of Kaduna work at N4.5bn.
“Purchase of State House operational vehicles for N4bn; replacement of SUV vehicles for N2bn; purchase of tyres for bullet-proof vehicles, plain cars, CCU vehicles, platform trucks, jeeps, ambulances and other utility and operational vehicles for N351m. Other include SAs and SSAs at N3.5bn; acquisition, renovation, rehabilitation and furnishing of State House Annex at N3.5bn. In State House Operations, there is the renovation of president quarters at the State House, presidential villa Abuja for N500m and N300m for the renovation of the Vice President’s quarters.
“The Office of the Chief of Staff to the President has a vote for the renovation of Dodan Barracks Presidential Lodge at N5bn; renovation of Vice President Quarters in Lagos at N5bn; and full digitalisation of the entire State House and Lagos State Offices and Quarters at N10bn. All the foregoing appropriations for the President and the Vice President exclude the provisions in the 2023 Supplementary budget which has just been approved. They also exclude the N15bn residence for the Vice President to be built by the Federal Capital Development Authority.
“This level of frivolity, inappropriateness, waste and lack of consideration for others is coming from the two frontmen, the president and his vice, who are leading the chorus on sacrifices and belt-tightening by the population.
“Now, we move to the big elephant in the room – service-wide votes of N4.409tn. By the time recurrent non-debt expenditure, debt provisions, and statutory transfers are added to this SWV, it becomes clear that the budget proposal will not shift the needle in favour of the average Nigerian. The SWV are lump sums of money voted without disaggregation to line items and projects that give little or no idea of what exactly they are to be used for.
“Some of them are unclear expenditure proposals. For instance, N108bn was voted for special projects; National Youth Development Fund of N25bn; unfunded liabilities of N6.9bn, etc. Service wide votes are not to be managed by ministries, departments and agencies that have the legal mandate on the issues but are put under the allocation of the Ministry of Budget and National Planning. Why is SWV paying the electricity bills of MDAs instead of allowing them to be responsible for their bills? Why is SWV retaining the money for international sports competitions instead of the Ministry of Sports?”
Less than a fortnight ago, the Chief Information Officer at Ministry of Steel Development, Maureen Tine-Iulun in a statement, said the minister made the request of N35bn funding from financial institutions when he received a delegation from Stanbic IBTC Bank, on Tuesday in Abuja.
The statement reads: “It has become imperative to seek funding of about N35bn to enable the re-start of the Light Mill Section of the Ajaokuta Steel Plant for the production of iron rod to achieve the agenda of the current administration to revive Ajaokuta in phases in accordance with its set timelines and benchmark.
“This is in furtherance of achieving its mandate of reviving the steel sector, improving industrialisation in the country, diversifying the economy, providing jobs for the teeming youths and growing the Gross Domestic Product, is collaborating with Financial Institutions, for best financing options to re-start the light Steel Mill in Ajaokuta.”
Speaking further, Audu disclosed that the ministry has an existing agreement with the Works Ministry to be off-takers of the rod produced as well as with the Ministry of Defence to build a Military Complex in Ajaokuta, adding, “We have huge opportunities in Ajaokuta and potentially a lot can be achieved.”
Earlier, the CEO, Stanbic Bank, Wole Adeniyi, who was represented by the Head of Industrials, Debola Seriki, expressed the bank’s willingness to partner with the Ministry, while requesting further details for their consideration towards realising the project.
In the same vein, the statement added that the minister met with top management of United Bank of Africa and Voda Infrastructure Management Ltd with a view to ensuring that funds are raised for the immediate take-off of the project for sustainable development of the Steel Sector.
