Ajaokuta staff get N4.3bn package despite shutdown of steel complex

AJAOKUTA Steel Complex is currently not in operation and staff members are not going to work.

In spite of that, the staff will have to decide what to do with N4.296 billion personnel cost budgeted for them in the 2024 appropriation bill.

The personnel cost covers their wages and salaries, travel allowances, regular allowances, welfare packages, among other benefits.

Economy Post confirmed from Sole Administrator, Ajaokuta Steel Complex, Mr Abdul-Akaba Sumaila, that the troubled publicly-owned plant was no longer in operation and no activity had been taking place there for a while now.

READ ALSO: Ajaokuta: Buhari approved N33bn for dormant steel company, $500m compensation, millions in export grant

But this does not matter to the Nigerian government which has, again, proved that no one needs to work to earn a living at Ajaokuta Steel Complex that has failed to produce a single sheet of steel for over 40 years.

The Nigerian government under the Ministry of Steel Development budgeted a whopping N4.454 billion for expenditure at the complex in the coming year.

Regular allowances of staff in 2024 stand at N1.28 billion, while local travels will gulp N13.9 million. Newspapers, which have been separated from magazines, will cost N180,000. Magazines and periodicals, on the other hand, will take N114,000.

There will also be a fictitious local training for staff members, which is set to cost N3.5 million as well as fuel that will gulp N10.64 million.

There will also be refreshment and meals for staff and visitors, which are estimated to gulp N1.8 million, including honorarium and sitting allowance that will cost N1.5 million. Welfare packages will cost N2.161million, and the complex will also buy some computers valued at N4.33 million.

Also, electricity repairs will gulp N12.9 million, whereas security equipment will cost N5.8 million.

Water will also be available for everybody at the cost of N34.85 million, with security charges taking N29.026 million.

Questions, no answers

Questions have continued to agitate the minds of many as to why the complex continues to get federal budgets when it is dormant.

READ ALSO: Revealed: 5 conditions accepted by Nigerian govt before taking $4.7bn Chinese loan

“This means that people may be pocketing the money. It is left for the government and the anti-corruption agencies to figure that out,” an anti-corruption crusader, Ms Mary Adih, said.

Ajaokuta Steel Complex was set up in 1979 to produce raw materials for the manufacturing sector and make the country a steel hub. However, the complex has been on “98 percent completed” since early 1980s when some rehabilitation work was done to improve its output.

Government after government has failed to concession or privatise it to give it a lease of life owing to politics, litigations and other social reasons, analysts say.

Economy Post had reported that the Nigerian government under former President Muhammadu Buhari spent N29.606 billion on personnel cost of staff of the moribund steel complex from 2016 to first half of 2023, even though the plant produced zero steel.

He also appropriated N32.63 billion ($107m) for the complex, while approving about $446 million in judgment debt to compensate a bankrupt firm, Global Steel Holdings, owned by an Indian man, Mr Pramod Mittal.

Under Buhari, unnamed consultants got N853 million to facilitate the plant’s concession, but up till now, the concession has not happened, raising questions as to why they received the payment.

READ ALSO: Nigerian govt spends N30bn on Ajaokuta staff salaries, steel imports hit N5.75trn

The Bola Tinubu government has continued on his predecessor’s line without asking questions, even with Minister of Steel Development, Mr Shuaibu Audu, comes from Kogi State, where the steel complex is domiciled.

A spokesperson for the government did not respond to questions as to why the complex had continued to receive huge allocations even when it was not producing anything.

Steel imports rising

Nigeria spent N5.902 trillion to import metals which Ajaokuta was supposed to produce from 2016 to the first half of 2023.

From N482 billion in 2016, metals import cost rose to N1.060 trillion in 2021 before falling to N851.393 billion the following year. From January to June 2023, a total of N372.14 billion was spent on steel importation into Africa’s most populous nation. The importation took place mostly in dollars but Nigeria’s statistics agency converted the amounts to naira, Economy Post understands.

No serious plan for Ajaokuta

The dormant Ajaokuta Steel Complex has more than 200 staff who receive huge wages, Economy Post found.

Out of the N32.63 billion allotted to the development of the steel complex from 2016 to 2023, N29.606 billion went to personnel cost of staff, representing 91 percent of the total.

READ ALSO: Mr President, Nigerian economy must grow by 42% annually to hit $1trn in 2026

Only N2.338 billion was deployed to capital expenditure within the period, showing that insufficient efforts were made to revivify the plant in seven and a half years under Buhari.

Analysts say this is an indictment on the Buhari administration and the management of the complex, saying they never had any plan to develop it.

In like manner, the Tinubu administration has budgeted N4.296 billion for personnel cost out of the total budget of N4.454 billion, representing 96.4 percent of the total. No plan has been made for complex’s rehabilitation or resuscitation.

Change your style, analysts advise govt

Analysts have advised the Nigerian government to speed up the process of concession or privatisation of the steel plant to give it a lease of life.

READ ALSO: Busted: Nigerian govt agency uses fake contractors to execute over N800bn project

Chief Executive Officer of Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, who worked in the steel plant in the past, said political interference and corruption had stalled the progress of the plant.

“Right now, what we need to do is to unbundle the plant. It is so huge, so we may need to unbundle it to separate various sections such as the machine section, the technical section, the power plant and others. After doing that, get the private sector – a competent company- to manage it,” he added.

A former staff member of Ajaokuta Steel, Mr Jones Adekunle, regretted that successive governments had ended up killing the plant through wrong concessions, urging the government of Mr Tinubu to sell it as soon as possible.

“Get a good buyer; they are still available. Forget countries that handled it before. Get a new company that can handle it, revive it and enable it to produce. My fear, however, is that most of the plants there may have been archaic and cannot compete favourably with what we have in the global market today,” he noted.

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