According to the National Bureau of Statistics (NBS) Foreign Trade Statistics, Nigeria spent $1.038 trillion on the importation of iron and steel during the course of the previous nine months.
Similar to this, between 2016 and the beginning of 2022, the Federal Government invested N21.3 billion in the failing Ajaokuta Steel Complex. Between July and December 2021, imports of basic metal goods totaled N748.529 billion, while imports of iron and steel totaled N88.232 billion.
The largest economy in Africa during the first three months of 2022 imported metals worth N201.08 billion. The NBS report for the first quarter of 2022 did not, however, provide information about the worth of iron and steel.
Data collated from the appropriation bills available on the website of the Budget Office of the Federation showed that N295.1m was allocated to Ajaokuta in 2016, with N135.2m released by October of that year.
The overall budget for 2017 was N4.3 billion, of which N3.9 billion went toward recurrent expenses and N354.1 billion for capital expenditures. The overall budget for 2018 was N4.3 billion, of which N3.9 billion went toward recurrent expenses and N354.1 billion for capital expenditures.
The overall budget for 2019 was N3.6 billion, with N3.3 billion going toward recurring expenses and N262 million going toward capital expenses. The overall budget for 2020 was N3.7 billion, with N3.6 billion going toward recurring expenses and N147.2 million going toward capital expenses.
The overall budget for 2021 was N4.2 billion, with N4 billion going toward recurring expenses and N253.9 million going toward capital expenses.
The Federal Government granted N853 million in 2022 for consulting services related to the concession of the steel complex. The Ajaokuta Steel Complex has received N21.3 billion in total over the past six years.
The Manufacturers Association of Nigeria estimates that the country has pumped over $8 billion into the idle steel plant so far.
The situation is riling the major players in the sector who wonder why the Federal Government watches the country’s huge import bill while Ajaokuta and the local steel sector struggle.
Former Chairman of the Manufacturers Association of Nigeria Steel Group and Chief Executive Officer of Qualitec Industries, Engineer Oluyinka Kufile, said there was nothing happening in Ajaokuta, wondering why the government was yet to summon the will to privatise the steel complex.
Kufile said, “There is nothing happening in Ajaokuta Steel. The local companies that are supposed to benefit from it are dying off. Who then is gaining from it?” he queried.
He lampooned government policies for the weakening of the steel sector, noting that concessions of Ajaokuta done over the years had not worked due to a lack of political will to put the plant into the competent hands.
“How many steel companies exist today? Initially, we were many in the industry, but today, we are not usually more than nine company representatives any time we have a sectoral meeting.”
The Federal Government recently engaged CPCS Transform Consortium at N853 million for consultancy services of Ajaokuta Steel Company, including the National Iron Ore Mining Complex in Itakpe.
Different schools of thought are providing perspectives on ways of handling the behemoth. One school of thought wants the government to rehabilitate and operate it, while the other wants some form of private sector involvement to ensure efficiency.
“But the problem is that the technology there may have been overtaken by the 21st century,” said market analyst, Ike Ibeabuchi in a note, stressing that “rehabilitate and sell will be the best option.”
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