Nigeria’s Parliament Takes Action on $496m Payment for Itakpe Iron Ore Concession
The National Assembly Joint Committee on Steel Development has recently decided to launch an inquiry into the $496 million payment made by the Nigerian government to an Indian company for its unsuccessful attempt to revitalize the Itakpe Iron Ore Company. This action was prompted by the termination of the agreement with Global Infrastructure Holding Ltd. (GIHL), the Indian firm that took over the National Iron Ore Mining Company (NIOMCO) in 2016 and had its agreement terminated in 2019 due to non-performance.
The failed concession agreement was brought to light during a session in which the Minister of Steel Development, Shuaibu Abubakar Audu, and his ministry officials defended the 2024 budget at the National Assembly. According to Audu, the concession was terminated because the firm failed to meet its obligations by exporting iron ore instead of producing it for the Ajaokuta Steel Company. Consequently, the federal government became embroiled in litigation and subsequently paid $496m to the Indian firm as damages for breaching the agreement.
During the session, a member of the Committee, Senator Natasha Akpoti Uduaghan, raised concerns about the reasoning behind paying N1.5bn annually to the staff of a concessioned firm, as well as the lack of transparency in the termination of the agreement. She also questioned whether there was a penalty for the breach of the agreement by the Indian firm and demanded details of the litigation. Her sentiments were supported by Dr. Zainab Gimba, the co-chairman of the committee, who agreed to hold a public hearing to further investigate the concession agreement.
The officials of the ministry who accompanied the Minister confirmed that the salaries of the workers at the firms, amounting to about N1.5bn annually, were being paid by the federal government during the three-year period of the concession. These disclosures have raised concerns among the members of the committee, leading to a decision to probe the entire concession agreement in a public hearing at a later date.
The decision to investigate the payment and the failed concession agreement demonstrates the Parliament’s commitment to upholding transparency and accountability in its dealings. As the probe continues, it is crucial to ensure that all parties involved are held accountable for their actions and that measures are put in place to prevent such incidents from reoccurring in the future. It is imperative to maintain the integrity of such agreements to safeguard the interests of the country and its citizens.
As the details of this issue unfold, it will be interesting to see how the Parliament addresses the concerns raised and what steps will be taken to rectify the situation. Such actions are essential in building public trust and confidence in the government’s ability to manage concession agreements effectively. Let us hope that this investigation leads to positive outcomes and serves as a catalyst for better governance and responsible decision-making.
