In a heart-wrenching observation, the sight of the Ajaokuta Steel Company (ASC) deteriorating under the African sun is enough to make any Nigerian weep. This sentiment was expressed firsthand by financial analyst Kalu Aja, who, despite writing numerous articles on the topic, felt compelled to delve into a more comprehensive analysis of the lingering issues plaguing the steel mill.
Established with an investment exceeding $8 billion, ASC is not just any facility; it’s an industrial behemoth equipped with a 68km road network, 24 housing estates, a seaport, and a 110 MW power generation plant. It houses 43 separate plants and, if operational, is expected to generate 500,000 jobs, underscoring its potential impact on Nigeria’s economy.
Nigeria, like any industrialized nation, stands to benefit immensely from a thriving steel industry. Current statistics from the Central Bank of Nigeria indicate the country imports roughly 25 metric tonnes of steel and aluminum products annually, costing around $4.5 billion—a figure set to rise with economic expansion. The irony? Ajaokuta has all the makings of a self-sufficient entity designed to harness local resources for steel production, yet it remains non-operational.
The technical intricacies of steel manufacturing involve iron ore, coke from coal, and limestone—elements abundantly available in Nigeria. However, the raw materials present have their challenges. The iron ore from Agbaja, for instance, is rich in phosphate which compromises steel’s integrity, leading to its abandonment for the Itakpe iron ore, which is unfortunately of lower iron content. The Itakpe ore requires beneficiation to upgrade its quality, an essential step for its use in steel production.
Complicating matters further is the type of coal available in Nigeria; predominantly non-coking, it is unsuitable for steel production. Thankfully, Nigeria is not lacking in limestone reserves, and with ample natural gas, power supply isn’t the stumbling block.
The crux of ASC’s problem lies in the integration of its components. Originally contracted to the Soviet state-owned Tiajpromexport (TPE) with a completion date set for 1986, the facility has seen numerous setbacks. The critical elements necessary for its operation, including the National Iron Ore Mining Company (NIOMCO) essential for processing Itakpe’s ore, the railway linking Itakpe to Ajaokuta for ore transport, and the blast furnace necessary for steel production, remain non-functional or incomplete.
Policy missteps and implementation failures have seen the steel plant remain a giant in slumber. For instance, despite rolling mills set up for producing steel from imported billets, the absence of an operational blast furnace means ASC can’t produce steel from primary iron ores locally.
The recent history of ASC is a narrative of mismanagement and missed opportunities. It has changed hands from the Soviets to Americans and Indians, each leaving their mark but none reviving the giant. Allegations of asset stripping and inefficient governmental oversight abound, painting a bleak picture of misdirected funds and initiatives.
In conclusion, while the potential to make Ajaokuta a profitable venture still exists, it would require a colossal investment to synchronize the steel plant with requisite mining and transportation infrastructure. Aja suggests a pivot away from government-led management towards privatization, allowing for private capital and expertise to resurrect this dormant giant. As Aja poignantly puts it, one cannot make jollof rice by merely boiling water without rice; similarly, Ajaokuta needs more than just superficial efforts to become the powerhouse it was envisioned to be.