UNDER former President Muhammadu Buhari and current President Bola Tinubu, the staff of Ajaokuta Steel Complex, a Federal Government-owned manufacturing outfit that has not produced a single sheet for over 50 years, received N41.8 billion without working.
Ajaokuta Steel Complex has maintained over 500 workers over this period, with many of them not reporting to work. Former President Buhari paid the staff of the complex a total of N29.606 billion between 2016 and the first half (H1) of 2023, according to Economy Post‘s calculations. President Tinubu, on his part, allocated N6 billion for personnel cost in 2024 and N6.21 billion in 2025.
This year, the steel complex allocated N104.6 million for the “provision of water facilities” and N60 million for “repairs of roads, drainages and culverts.”
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It budgeted N50 million for the “maintenance of main admin and welfare building (Mawb) and its facilities.” Ajaokuta Steel is also spending N71.731 million for the “maintenance of power facilities” and N40.325 million for the “lighting safety and security.” It also set aside N30.242 million for “computerization of Finance and Account Department in compliance with IPSAS” and another N10 million for the “computerization of Commerce/Procurement Department in compliance with BPP standard.”
$446m judgment debt
Former President Buhari also approved millions of naira in export grant for the company and paid about $446 million in judgment debt to compensate a bankrupt firm owned by Mr Pramod Mittal, Global Steel Holdings, Economy Post had earlier reported.
Mr Buhari spent the huge amount of money to save the inactive publicly-owned company despite calls for the government to concession or privatise it.
Ajaokuta has cost Nigeria over $8 billion since 1971 when it was established, but it is yet to produce a single sheet of steel.
The Nigerian Senate, in December 2018, passed a bill seeking to allocate $1 billion from the Federal Government’s share of Excess Crude Account for the completion of the steel company.
This was widely criticised, considering that there was a business case to sell the complex to the profit-focused private sector or even concession it.
There are suspicions that politicians and civil servants are using the company as a conduit pipe to steal public funds and compensate relatives.
Ajaokuta Steel Complex was established to generate important upstream and downstream industrial and economic activities that would be critical to the diversification of Nigeria into an industrial economy. Several raw materials were expected to be produced by the steel complex, but this did not happen as successive governments failed to make it work.
Export grants without export
Ajaokuta Steel Complex has not produced any sheet of steel and has not exported anything, but the Senate in 2019-2021, under Mr Ahmed Lawan, approved export grants for the company.
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The Export Expansion Grant (EEG) was created by the Nigerian government to enable exporters to become competitive in the global market. It involves provision of tax credit grants to reduce exporters’ production and logistics costs.
Ajaokuta Steel Complex, which has neither produced nor exported a single sheet since its establishment in 1971, received N118.006 million as export grant in 2019. Economy Post investigations showed that the company also received the same amount in 2020 and 2021 despite not exporting anything.
No, we didn’t export anything -MD
Economy Post had contacted Sole Administrator of Ajaokuta Steel Complex, Mr Abdul-Akaba Sumaila, at that time to find out if the company had actually exported any by-product.
“There is no production activities in Ajaokuta Steel and hence no exportation,” Mr Sumaila replied to Economy Post’s enquiries.
It was difficult to get the response of the 10th Senate as the approval was done by an ad hoc committee of the 9th Senate.
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The Nigerian Export Promotion Council (NEPC), which forwarded the lists to the Senate, said it was not aware of the inclusion of Ajaokuta Steel in the list of EEG beneficiary companies.
Sell the complex now, experts say
Experts have asked the government of Mr Bola Tinubu to get a good private sector manager to handle the plant. A former Chairman of the Manufacturers Association of Nigeria Steel Group and Chief Executive Officer of Qualitec Industries, Engineer Oluyinka Kufile, said the government was playing politics with the steel plant.
He said some persons were benefitting from the non-operations of Ajaokuta Steel to import all sort of steel products into the country, claiming that it was possible that some of them were not paying tariffs.
A former staff member of Ajaokuta Steel, Mr Jones Adekunle, regretted that successive governments had “killed” 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 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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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.
