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At a recent Federal Executive Council meeting, the Federal Government voided the sale/concession of the Ajaokuta Steel Company Limited (ASCL), National Iron Ore Mining Company (NIOMCO) and Delta State Company earlier ceded to Global Infrastructure Holding Limited (GIHL) in August 2004. The pronouncement was hailed across Nigeria as a timely intervention to the steel development dream of the country.
For almost four years that GIHL ran Ajaokuta, it did not fulfil its mandate to rehabilitate, commission and operate at a production capacity of 1.3 million tonnes per annum (as contained in the agreement). Nor was there any minimal leap in the steel company’s growth. Instead and in the submission of the administrative panel of inquiry set up to look into their operations, "GIHL has been diminishing the values of ASCL and NIOMCO to buoy up their fortunes". It is therefore not hard to see why the panel arrived at the indicting conclusion. GIHL has also been accused severally of cannibalisation and asset-stripping in Ajaokuta. The panel had also questioned the paltry sum of N300 million that Ajaokuta was sold for. Again, instead of GIHL injecting more funds into Ajaokuta, it embarked on massive borrowings from various banks in Nigeria (for which debt stood at N24 billion) using Delta Steel as collateral without board approvals to incur such debts. Since the concession agreement was signed in 2004, there has been no record of upward growth in the country’s steel development. Nigeria needs an average of 100 million tonnes of steel annually to meet the minimum per capita steel consumption of 130 kilograms, a pre-requisite for steel development and industrialisation for any nation. As at today, Nigeria’s consumption rate is six kilograms and only one kilogramme is produced locally. The rest is imported. The concession agreements were also skewed in favour of GIHL to the detriment of Nigeria, especially the provision granting GIHL the right ‘to repatriate all earned profits’. Based on the Economic and Financial Crimes Commission’s (EFCC) interim report, the Yar’Adua government rescinded the agreement because of "breach of agreement and unwholesome practices", and ordered the criminal prosecution of indicted officials of both the FG and GIHL for asset-stripping. We commend the Federal Government’s intervention in the sale because GIHL only succeeded in crippling Ajaokuta and scuttling our steel development. However, more needs to be done to unravel the masterminds of the agreement, the under-pricing, subsequent cannibalisation and asset-striping after it had promised to turn around Ajaokuta in steel production. It is incumbent on the Federal Government to complete Ajaokuta. Besides the mandatory repositioning of the dying steel firm, all allegations of complicity in the concession agreement must be looked into. In doing so, the Federal Government has to ask many questions. Why did the Obasanjo government choose to strip the nation of its national assets only to sell them to foreigners for a pittance? Who are the promoters of GIHL? Who are the beneficiaries of the skewed agreement? Was borrowing from banks using another national steel company as collateral part of the agreement? What is the worth of the concentrates and other assets already taken away by GIHL? It is pertinent to ask these questions because the Obasanjo government produced two concessionaires for Ajaokuta and both ended in ignominy with allegations of fraud, double dealings, inefficiency, corruption and lack of technical competence trailing them. Even with SOLGAS’ incompetence and allegation of impropriety, nobody has been prosecuted up till today. Ajaokuta has become the nation’s white elephant project which successive governments have exploited without meeting the basic mandate of making it to serve as a catalyst for industrialisation and employment generation. Needless to say, the Obasanjo government worsened the horrible situation and took the nation many steps backwards. Controversies, manoeuvres, high-wire nepotism, political intrigues and lack of transparency characterised Obasanjo’s handling of Ajaokuta and many other national assets. Here lies the big task ahead. President Yar’Adua must find a solution to the Ajaokuta quagmire. His government should ensure its completion by injecting money into it and ensuring that companies with the technical know-how are involved in its management. Above all, the Yar’Adua government should leave no stone unturned in the investigation and prosecution of all culprits. The full wrath of the law should be employed to ensure the success of the investigation.
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