The Dangers of Transferring Ajaokuta Steel to Foreigners

A recent statement from the Social Integrity Network (SINET) has urged President Bola Ahmed Tinubu to intervene in the potential transfer of Ajaokuta Steel Rolling Mill to foreign entities. According to SINET, this move runs counter to the national interest of protecting Nigeria’s heritage and could have detrimental effects on the country’s economy.

The group highlighted the recent resolution passed by Nigerian lawmakers to investigate the $496 million payment made by the Federal Government to an Indian firm. This payment was intended to revitalize the Itakpe Iron Ore Company, but after three years, the expected results have not been achieved.

SINET emphasised the importance of prioritising national companies that have the capability to effectively operate such plants. By doing so, they believe that employment generation will increase, imports will decrease, and the country will retain much-needed forex and mineral resources.

The group expressed concern over allowing foreigners to dominate Nigeria’s business space, especially given the presence of qualified and experienced individuals within the country. They raised objections to the involvement of foreign firms in the takeover of Ajaokuta and Delta Steel Company, citing the age of these facilities and the potential for misleading the nation with promises of profit.

One specific case highlighted by SINET was that of Global Infrastructure Holding Ltd. (GIHL), which took over the National Iron Ore Mining Company (NIOMCO) in 2016. However, due to nonperformance, GIHL’s agreement was terminated in 2019, resulting in a legal battle and the payment of damages amounting to $496 million.

SINET firmly denounced the government’s willingness to sell off national heritage without considering the views of the Nigerian people, especially during a period of economic instability. They pointed out that previous attempts to strengthen large-scale steel production in Nigeria had failed, and questioned the wisdom of relying on outdated technology from the 1970s.

The group also accused GIHL of siphoning resources out of the country without providing any real benefit in return. They highlighted the transfer of stakes in Delta Steel Company to Stallion Group under an SPV to Premium Steel & Mines Limited, criticising the move as a means of concealing illicit financial activities.

In light of these concerns, SINET urged the federal government and relevant ministries to thoroughly assess detailed project reports, business plans, and financial projections. They recommended the involvement of independent agencies and experienced business leaders in Nigeria to ensure transparency and accountability in any future decisions regarding the Ajaokuta Steel Rolling Mill.

The appeal from SINET serves as a warning against the potential dangers of transferring essential national assets to foreign entities. It underscores the need for careful consideration, thorough evaluation, and the protection of Nigeria’s economic and industrial interests. By taking heed of these concerns, the government can work towards promoting sustainable growth and development within the country’s steel industry.