The Federal Government has paid workers of the moribund Ajaokuta Steel Company the total sum of N38.9bn as salaries and allowances in 10 years, Saturday PUNCH reports.
This is despite the inability of the company to produce a single sheet of steel since its inception.
The Ajaokuta Integrated Steel Complex, conceived in 1979, was developed to establish a Metallurgical Process Plant alongside an Engineering Complex and various auxiliary facilities.
The complex is meant to generate important upstream and downstream industrial and economic activities that are critical to the diversification of the economy into an industrial one.
On its website, the company said it directly employed about 10,000 workers at the first phase of commissioning while the upstream and downstream industries that would evolve all over the nation would engage no fewer than 500,000 employees.
Ajaokuta Steel Plant, aptly known as the Bedrock of Nigeria’s industrialisation, is more than just a rolling mill—it’s an Integrated Iron and Steel Plant.
It boasts four distinct rolling mills: the Billet Mill, the Light Section Mill, the Wire Rod Mill, and the Medium Section and Structural Mill.
The plant utilises blast furnace technology, which is the most prevalent method for steel production, representing about 70 per cent of global liquid steel production.
By 1994, the plant was estimated to be 98 per cent complete in terms of equipment installation.
While some units of the plant were operational at various times, 40 out of the 43 planned units had been constructed.
However, due to mismanagement, the project remains incomplete over 45 years later.
At the Russia-Africa Summit in 2019, former President Muhammadu Buhari and Russian President Vladimir Putin agreed on a revitalisation of the steel mill with Russian support and project funding from the Afreximbank and the Russian Export Centre.
But it was delayed due to the COVID-19 pandemic and the agreement was abandoned.
In January 2024, Tinubu opened discussions with a Chinese steel company, Luan Steel Holding Group, to revive the Ajaokuta Steel Company.
That discussion has not yielded any results.
Despite its inactive status and reports of an ineffective workforce, the company continues to receive substantial annual budget allocations from the government.
Furthermore, the salaries of its employees are still accounted for in the government’s annual budget.
A breakdown of the company’s annual budget between 2014 and 2024 showed that it paid a total of N29.11bn in salaries and wages, and N9.8bn in allowances to its staff.
Further analysis revealed that the government disbursed N3.82bn for personnel costs in 2014, reduced marginally to N3.8bn in 2015, N3.55bn in 2016 and N3.84bn in 2017.
In 2018, an unverifiable number of workers at the company received a total sum of N3.76bn for salaries and allowances, N3.2bn in 2019, and N3.5bn in 2020.
The cost increased to N3.89bn in 2021, and N3.94bn in 2022 but dropped significantly to N1.22bn in 2023.
The company didn’t announce any retrenchment exercise during this period. The cost, however, increased by N3.07bn to N4.29bn in 2024.
At an investigative hearing recently, the lawmaker representing Kogi Central, Senator Natasha Akpoti-Uduaghan, took up the Sole Administrator of the Steel Company, Summaila Akaba, on several workers collecting salaries from the N4.2bn appropriated for personnel costs in the 2024 budget.
She said being an indigene of the area and desirous to get the steel company revamped and working, she made unscheduled visits to it and hardly found 10 people.
The lawmaker lamented further that despite spending money on personnel costs, no steel had been manufactured and no mill rolled.
She said, “The sum of N4.2bn was appropriated for personnel cost in 2024, but from several visitations I’ve made to the complex, hardly were 10 people sighted to be around or doing anything.
“So, who are the workers collecting monthly salaries from the appropriated N4.2bn?”
In the 2024 budget, the National Assembly increased budgetary allocation from N4.45bn in the proposed 2024 budget to N5.18bn in the approved version for the dormant Ajaokuta Steel Company.
This is an increase of N730m as the Federal Government plans to revive the moribund steel plant, which has been dormant for over 42 years.
At a briefing three months ago, the Minister of Steel Development, Shuaibu Audu, stated that the government was at an advanced stage of raising more than N35bn required to restart the Light Mill Section of the Ajaokuta Steel Company.
He also said data on technical analysis and evaluation by experts indicated that the government required between $2bn and $5bn to revive the Ajaokuta steel company within three years.
However, experts insisted that the best option was to privatise the company for effective maximisation of its potential.
Waste of resources – Economist
Reacting to the payment of workers, an economist and researcher, Paul Alaje, said it amounted to a waste of the country’s resources, calling for a public-private partnership to revamp the company.
Alaje, who is the chief economist at an economic development research firm in Lagos, SPM Professionals, said, “It is wastage. But the truth is that labour has to be paid. It is not their fault that the place isn’t working. It is the government that doesn’t have work to give them.
“It is the work of the employer to provide what labour will do. But when the employer is laid back, there is an issue.
“That is why the Federal Government needs to engage in public-private partnership immediately or allow the foreigners who started the projects to partner with the Federal Government for the completion of the Ajaokuta steel mill.
“The billions of naira spent were not just in Ajaokuta, I imagine they are spending tens of billions to pay salaries in four refineries that are not working. How can you pay people for not working?
“We lose hundreds of millions of naira at different offices of government to people not working. It is not that they don’t want to work, but there is no work for them to do.
“I will not support a total disposal of the Ajaokuta steel mill. I will support a situation where we partner with the private sector. We can do 60-40, or partner with the foreign company that started it.
“The best thing to do is to move the workers at the company to agencies in need of workers, but that will also mean that there are no more eyes on Ajaokuta steel mill. Some of the fixed equipment will disappear overnight. Why can’t we make it work? Some people are in the steel business in Nigeria. Can’t we give part of the shares to them?”
Speaking with Saturday PUNCH, a professor of Economics at Obafemi Awolowo University, Osun State, Abayomi Adebayo, said paying such an amount would translate to throwing the country’s scarce resources into the drain.
He added that the Federal Government should rather terminate the workers’ appointments and stop paying them salaries for work not done.
He said, “Anytime you are paying a worker that is not producing anything, you are throwing your money into the drain. It’s simply a drain on the Nigerian economy and a manifestation of absurdity in governance because if you know that the place is not functioning, why not terminate the appointment of the workers there?
“They have to rationalise the staff. You can’t continue to pay people who are not working because so many issues about that job are not yet resolved. I can’t understand why somebody will continue to pay like that.
“It’s a show of irresponsibility. It’s a show of the fact that they don’t have the love of Nigeria at heart and some of the workers would have found their way out of the country and be working elsewhere. It shows how much we love our country.”
