The neglect and lack of political will to resuscitate the abandoned Ajaokuta Steel Company Limited (ASCL) and other inland rolling mills in the country has cost the nation a whopping N589.41 billion in iron and steel imports within the eighteen (18) months of the Buhari administration, Economic Confidential investigation has revealed.

From an official document in possession of this intelligent magazine, N354.45 billion represents iron and steel imports for 2015 alone between May 2015 and end of last year while the sum of N234.96 billion represents the value of iron and steel imports for up to September 2016.
However, the value of iron and steel imports for 2016 declined as compared to last year by about N119.49 billion due largely to foreign exchange difficulties by importers and the current recession.

The categories of iron and steel imports into the country in 2015 include, iron and non-alloy steel in ingots and other primary forms, semi-finished products of iron or non- alloy steel, semi products of iron/steel 0.25% carbon of squarish section, semi products of iron/steel 0.25% carbon of rectangular section, ferrous waste and scrap remelting scrap ingots of iron/steel, waste and scraps of stainless steel and granules and powders of pig iron and turnings, shavings, chips, milling waste of iron and steel among others.

As for 2016, Flat/hot-rolled iron and steel measured at 600mm not pickled remains the category mostly imported because they are used in various aspect of iron and steel industry both in upstream and downstream. Others iron and steel categories imported include but not limited to table, kitchen or household articles of cast iron, not enameled, table, kitchen or household articles of cast iron enameled, stainless steel, sanitary ware and parts thereof of iron and steel, sinks and wash basins of stainless steel, baths of iron, grinding balls, iron and steel accessories for electrical installations, monofilament rods for tyres and a host of other items.

The development has no doubt cast doubt on whether the government has the political will to tackle problem of iron and steel importation in spite of the huge resources available to turn the table around for the progress of the nation.

Though reports indicate that Ajaokuta Steel Company Limited has become obsolete, experts are of the view that the steel complex is 98% completed and only needs a helping hand to rebound.

Speaking shortly after his appointment as the Sole Administrator of the Steel Plant, Engineer Isa Joseph Onobere said the recent technical audit carried out by the Ukrainians who actually inspected it noted that “the situation of the steel plant’s equipment and facilities are satisfactory. Mechanically, the steel plant equipment and facilities are generally in good condition”.

Engineer Onobere further explained that the Blast Furnace Technology of Steel Making adopted in Ajaokuta is still the best method through which large volumes of Steel are produced in the World today.

Quoting from the world reliable statistical year book dedicated mainly to steel, he posited that in year 2011, the World Steel Statistical Year Book put the total crude Steel production in 2010 at 1.4 billion tonnes. Out of this, 1.04 billion tonnes is through the Blast Furnace Technology, giving an average of 74% of total steel produced in the world. This is the Technology adopted in Ajaokuta Steel Plant. This prove has undoubtedly thrown off balance the argument of those who believe that Ajaokuta has become obsolete.

Given the benefit of hindsight, all developed nations got to where they are today because they have a virile Steel Sector; even when some of them like Japan have no raw materials for steel production. Nigeria that has virtually all the needed raw materials for steel production is still in doldrums. This is calamitous judging by Nigerian leaders’ penchant for lip service in diversifying her economic base for eventual breakthrough in industrialization.

Iron and steel industry stakeholders are of the view that revival of Steel Industry is the only panacea to Nigeria’s unemployment and industrialization debacle. Recently, a major stakeholder, the Iron and Steel Senior Staff Association of Nigeria (ISSSAN) said that the “death” of the steel industry in the country aggravated the nation’s unemployment rate.

Deputy-General Secretary of the association, Mr Adewale Okesola, observed that unless the steel industry was revived, unemployment problem in the country would persist.

He said that the Ajaokuta Steel Company alone, if revived, could employ no fewer than 140,000 Nigerians, stressing that if Ajaokuta alone can absorb so much unemployed Nigerians, then we can be sure that the other steel firms, if also revived, would employ much more.

“So, let the government ensure the revival of the steel companies scattered around the country. “By the time Ajaokuta, Delta, Osogbo, Jos and Kastina steel firms are revived, we will not be talking of unemployment in the country,’’ he said. Okesola added that apart from creating direct employment, the revival of the steel sector would also create indirect employment for millions of Nigerians.

According to him, the revival of the industry would definitely aid the growth of the country’s new automobile industry and the transformation of the epileptic Nigerian Railway Corporation.

“Government knows the genesis of the nation’s calamity in terms of unemployment, except if they do not want to be sincere.
“If the government can be sincere and focused; if they can pump money such that the steel industry will pick up, we will forget some of our current plagues,” he said.

The union’s secretary further noted that lack of commitment, corruption and politicisation of the steel sector, were responsible for its ruin, adding that the problems had also hindered all efforts to transform the industry.

HOPE RISING IN THE STEEL SECTOR?

Though the Federal Government has in the umpteenth time said the country’s steel demand is about 6.8 million metric tons per annum, the comatose industry cannot meet this huge demand, hence the need to revitalize the sector. The environment , experts say, is not even conducive for investment, and this must be the reason why investors have continued to shy away from the sector.

But recent happenings may likely spur investors as government seems to be developing a gradual political will to free this country of steel import bondage.

The Minister of Solid Minerals, Dr. Kayode Fayemi, had towards the later part of the year presented a mining plan to President Muhammadu Buhari. That in itself is a welcome development as investors believe such moves would in the long run bring sanity. Apart from this leap, a sector regulator would be an ideal setting as is evident in all serious steel nations around the world.

Dr Fayemi personally observed that “Currently, the ministry does everything: licensing, monitoring, inspection, and it should not be like that” he said. He also said, prospective investors have expressed concern about an uncertain regulatory environment. An autonomous agency would be better positioned to focus on performance and efficiency of the sector, according to the minister. The new legislation will include incentives such as allowing full foreign ownership of mining projects in order to attract investments, Fayemi said. Nigeria will also require about $2 billion to revive Ajaokuta, a steel complex which was supposed to have an installed capacity of 5 million tons of steel a year.

But one major huddle affecting the full realization of Ajaokuta Steel Complex which the federal government took recently was the signing of a renegotiated concession agreement with Global Steel Holdings Limited for the Nigerian Iron Ore Mining Company (NIOMCO), Itakpe. That major step was a quantum leap in efforts by government to revitalize the steel sector as Ajaokuta Steel Complex has now reverted to the Federal Government, effectively freeing the entity from all contractual hiccups that had left it uncompleted and non-functional for many years, while the Indians retain Itakpe mines.

Will the new agreement break the Ajaokuta jinx? Time will tell. The new deal, which came after 48 months of mediation, was signed at a short ceremony presided by the Vice President, Yemi Osinbajo, in Abuja.
Solid Minerals Development Minister, Kayode Fayemi, signed on behalf of the government, while the Chairman of Global Steel, Prammod Mittal, signed on behalf of the company.

The Minister of State for Solid Minerals Development, Abubakar Bwari; the International Mediator, Phillip Howell-Richardson, and top officials of the Ministries of Justice and Solid Minerals Development also witnessed the signing ceremony.

Speaking at the event, Prof Osinbajo thumbs up the mediation process that led to the resolution of the crisis that had made it impossible for the two national assets to be functional for years.

“It is one of the cases of failures,” Mr. Osinbajo said. “It is a tragedy of immense proportion that we have both Ajaokuta Steel Complex and NIOMCO and couldn’t get anything out of them for years.”

Prof Osinbajo said making the entities to work remained a top priority of the administration, and urged Global Steel to keep to the various timelines in the agreement in the spirit of mediation.

He added that it was important the concession work “so that Ajaokuta can take off too.”

Mr. Fayemi, who led the Federal Government side in the mediation process, said with the new agreement on NIOMCO, the next step was to commence the process of taking over Ajaokuta and ensuring that it was given out to a serious operator with proven technical and financial capacity.

“It is our expectation that we would accomplish two things- bring NIOMCO to full function and starts the process of retaking Ajaokuta and then give it to a new operator”, said Fayemi.

“With this, we will move from being just a mineral nation to a mining nation. Once the first phase of the agreement is accomplished, it is the intention of the FGN to quickly move into accomplishing the objectives of concessioning the Ajaokuta Steel Plant to the most competent operator who meets the requirements of credible track record, technical capacity and financial competence.

“Overall, we are confident that this landmark settlement is a pointer to what to expect in the Government’s determination to fix the Nigerian mining sector. This is one of the key milestones in the Road Map for the growth and development of the Nigerian mining sector and I want to thank our team from the Federal Ministries of Justice and Solid Minerals for their hard work and also thank GSHL for sticking to the provisions of the laws in seeking resolutions to the problem.”

Mr. Fayemi described the settlement as a landmark development that would help the diversification plans of the President Muhammadu Buhari administration.

The GSHL Chairman, Mr Mittal, said the company waited for 96 months to achieve this amicable settlement.

He said his organisation was committed to the objectives of the agreement and guaranteed supply to Ajaokuta plant and Delta Steel Company, after which it would sell what is left to other interested parties.
He assured the government of its readiness to commence operation soon, adding that in the next two years Nigeria would begin to produce steel.

The International Mediator, Mr Richardson, lauded the government and GSHL for taking the path of mediation as a means of dispute resolution.
Negotiations for amicable resolution of the Ajaokuta crisis had dragged on since 2008, leaving the country’s steel and industrial sectors largely comatose.

Following this settlement, the steel sub sector is on the way to being revitalized and Nigeria’s industrial base solidified, officials said.
Dispute over the ownership of the Ajaokuta Steel Complex and NIOMCO had made it impossible for government to make any long‐term plans for the concession or privatization of the two companies.

President Buhari gave approval for the execution of the modified concession agreement with Global Steel Holdings Limited, after he received the reports of the mediation meetings from the Ministry of Justice. All the mediation meetings held in London, United Kingdom.
Economic Confidential recalls a major highlight of the settlement that the Federal Government was able to negotiate a higher concession fee payable to it from three per cent of turnover to four per cent of turnover.

Apart from that the government was assured guaranteed and continued supply of iron ore to Ajaokuta Steel Company Limited as a priority customer.

It is expected that in the next 24 months, coupled with political will by the government, the steel sector would have been given a facelift, in order to put Nigeria in the comity of Iron and Steel nation.