After spending over $8bn on Ajaokuta, Nigeria imports N837bn steel

Steelmakers are sceptical about the planned concession of Ajaokuta Steel Company Limited after Nigeria imported iron, steel, and metals valued at N837.761bn in the third and the fourth quarters of 2021.

According to the National Bureau of Statistics, Africa’s most populous nation brought in basic metals, iron, and steel products with 6000mm in width, rolled, painted, varnished, and coated with plastics within the six-month period.

The total value of basic metal products imported within the two quarters was N748.529bn, while that of iron and steel was N88.232bn.

This is happening after the Manufacturers Association of Nigeria estimated that the country had spent over $8bn on the idle steel plant so far.

Key players in the steel sector are worried about the level of steel imports into the country as well as the lack of functionality of Ajaokuta Steel Company and the Aluminium Smelter Company, located in Akwa Ibom State. The smelter company is supposed to produce ingots for the production of roofing sheets in the country, but it is mired in a legal quagmire.

A former Chairman of the Manufacturers Association of Nigeria Steel Group and Chief Executive Officer of Qualitec Industries, Engineer Oluyinka Kufile, said, “They should tell us who imported the steel products because some people claim that they are producing but are simply importing.”

He noted that there was a possibility that the importers did not pay import duties or paid so little to jeopadise the local steel sector.

He lambasted the Federal Government for keeping Ajaokuta Steel for a long time without handing it over to competent managers, expressing doubts over the planned concession of the steel plant.

“Is there anything working in Ajaokuta? Is anyone benefitting from it since it was commissioned? Have they not done any concession before, which did not work? What makes anyone think it will work this time?”

On the Aluminium Smelter Plant, Kufile noted that Nigeria had not demonstrated enough will power to resolve the lingering issue.

“If your father created so many problems and you cannot resolve them, then you are not ready to move on,” he further said.

There has been a tussle between the Bureau of Public Enterprises and a Nigerian-American company known as Bancorp Financial Investment Group Divino Corporation.

In 2012, the Supreme Court had ruled that BFIG was the preferred bidder for the smelter plant, but the BPE is yet to hand over the plant to the company.

BFIG President, Reuben Jaja, claims that the BPE is frustrating the company’s attempts to take over ALSCON.

However, BPE Head of Public Communications Amina Tukur Uthman, in a statement sent to the correspondent recently, noted that the company defaulted in paying the initial 10 per cent of the bid price of $410m within 15 working days as stipulated in the Request for Proposal issued to bidders.

She said that BFIG also failed to provide the strategic business plan and the Annexure, which was the technical agreement with Daewoo.

“The transaction was frustrated by BFIG’s non-compliance with the terms of the judgment, mainly, being the bid price and the re-negotiation of the SPA,” she said.

On Ajaokuta Steel, Export Manager of the Lagos-based Aarti Steel, Okhai Ehimigbai, said that rather than concession Ajaokuta Steel, the government should privatise it completely.

The Federal Government recently engaged CPCS Transform Consortium for N853 million for consultancy services of Ajaokuta Steel Company, including the National Iron Ore Mining Complex in Itakpe.

But Ehimigbai said, “We have had this kind of arrangement in the past that did not work. Why not privatise it?”