Press Release: Ebira People’s Association (EPA) Rejects Sale of Ajaokuta Steel Company

Being a speech delivered by the President General of Ebira People’s Association (EPA), Dr Abdulrahman Adeiza at a press Conference organised by the association to reject the proposed sale of Ajaokuta Steel company

Protocols

It is with utmost concern that we address this press conference. A few days ago, news filtered in that the Federal Government of Nigeria is contemplating selling off the largest steel plant in Africa, Ajaokuta Steel Company Limited.
While briefing the Nigerian delegation at the end of the International Monetary Fund/World Bank Group meetings in Bali, Indonesia, on 14th of October 2018, the CBN Governor, Godwin Emefiele stated thus:
‘’I am aware, as a member of the National Council on Privatization, that in due course that the Bureau for Public Enterprise [BPE] will make this available for us. I am aware of the situation of Ajaokuta Steel Company of Nigeria. It is also on the cart, first for a total review of the processes of privatization and payment, so that our aluminium sector can eventually come alive’’.

Recall that when the idea about sale of Federal Government assets to generate revenue to fund the 2018, 2019 and 2020 budgets was first muted, the Director General of Budget Office, Ben Akabueze, had, while briefing the House of Representatives Joint Committees on 2018-2020 Medium Term Frame Work /Fiscal Strategy Paper, MTEF/FSP in November 2017, listed Federal Government’s non-core assets from the mines and steel sector as part of those to be sold.
The fact that none of these statements have been denied officially by the presidency are indications that government is seemingly committed to the proposed sale.

As citizens of the Federal Republic of Nigeria and representatives of the host community, we are worried that instead of concerted efforts to complete the steel plant, the Federal Government has chosen to sell the plant, thereby proving once again, that the government seem uninterested in developing the steel sector, and its multiplier benefits of wealth creation; to generate revenues and grow the economy.

Conceptualized to be the bedrock of Nigeria’s industrialization, the Ajaokuta integrated steel mill is the largest in sub Saharan Africa, occupying about 24,000 hectares of our ancestral land with huge prospects for massive economic benefits for both the host community and Nigeria at large. The enthusiasm with which the project was embarked upon by the federal government of Nigeria in partnership with the Soviet Union, beginning with the incorporation of Ajaokuta steel mill as a limited liability company in 1979 and the rapid progress that culminated in 98 per cent completion in 1994 at an estimated cost of 4.6 billion dollars, appear to have waned considerably over time.

Our concern for the worrisome neglect of Nigeria’s bedrock of industrialization is borne out of patriotism and also because it does not make sense to sell a vast industrial complex of about 40 years just to fund a year budget of 2018. We note without equivocation that Ajaokuta steel company’s viability can be validated and therefore should not be seen as a ‘quick win’ for the government without consideration for the future:
• As critical stakeholders in the Ajaokuta Steel project, it is our opinion that the road to privatization leads nowhere as experience in our recent history indicates. All previous efforts at privatization through concessions ended in failure as each of the concessionaires were nothing but corporate undertakers who engaged in massive asset stripping of the 98 per cent completed Ajaokuta Steel mill.

• With an installed power plant with the capacity to generate 110 megawatts of electricity and 40 out of the 43 plants fully completed, Ajaokuta steel mill has the capacity to engage 10,000 Nigerians directly and 500,000 others indirectly when fully completed and operational.

• Nigeria currently expends approximately 6 billion dollars annually on importation of products that can be produced in Ajaokuta steel mill if only the two percent component is completed by the federal government.

• A recent audit of the outstanding scope of work in Ajaokuta steel mill estimates about 600 million dollars as the cost of completion to allow for full operation. Considering the huge amount of 6.4 billion dollars that was expended between 1979 and 1994 to achieve 98 per cent completion and the relatively ‘little sum’ of 600 million dollars that is needed to complete the steel plant, with prospects of exiting Nigeria from the current high cost of steel import dependency (estimated at 6 billion dollars], it is in the interest of the country for the federal government to undertake the cost of completing the project.

• A completed and operational steel mill in Ajaokuta will create industrial hubs with mass job opportunities for Nigerians and wean the nation off scarce foreign exchange. To demonstrate seriousness about the diversification agenda of the current administration, will be to complete the Ajaokuta steel mill.

• By now, it is obvious and clear that after several rounds of trial and error, privatization is not the magic wand that will bring Ajaokuta steel mill to actualization as our experience from the past experiment leaves a sour taste in the mouth. It is our well-considered opinion that the federal government should as a matter of priority, engage the most competent handlers, to come and complete the project.

• Like power and energy, steel is a matter of national economic security that no private entity can undertake to actualize. Therefore, we call on government to shelve the idea of selling Ajaokuta steel company, invest in the completion of the remaining two percent.

• The solution to Nigeria’s cash crunch and dwindling revenue is actually in the completion of Ajaokuta steel project. Upon completion, Ajaokuta steel mill will generate enormous wealth for the Nigerian state as a full-fledged industrialized nation, which exports steel and allied products to earn foreign exchange.

• Finally, while we appreciate the efforts of His Excellency Alh Yahya Bello, the governor of Kogi state, who rose to occasion by taking our concerns to federal authorities and got reassurance that Ajaokuta will not be sold, we however, implore the government to set up a high level presidential panel with representatives of the Federal Government, Kogi State government and community leaders to access the viability or otherwise of the steel plant, reporting directly to the president before a final decision is taken on Ajaokuta Steel Company.

• We also want to bring to the attention of the federal government, the deplorable state of all federal roads across Ebira land. As the gateway between the north and the south of Nigeria, the deplorable state of federal roads especially along lokoja-Osara-Itakpe-Nagazi-Ogaminana-Okene axis, which has become impassable, has made the socio-economic life of our people and to a large extent other commuters very miserable. It is noteworthy that Kogi State government has in the past three years dissipated much of its lean resources in providing palliative resurfacing of this road. We are hereby calling for urgent attention of relevant authorities to bring succour to our people by embarking on the reconstruction of all arterial federal roads in Ebira land.

Thank you for your attention.

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