FG Has no Money to Complete Ajaokuta Steel

Ajaokuta Steel
  • FG Has no Money to Complete Ajaokuta Steel – Minister

Members of the House of Representatives and the Minister of State for Solid Minerals Development, Mr. Abubakar Bwari, disagreed on Monday over the fate of the Ajaokuta Steel Company Limited.

This happened as an ad hoc committee of the House chaired by the Majority Leader, Mr. Femi Gbajabiamila, opened a public hearing on the troubled steel plant.

The House is against the Federal Government’s plan to give the plant to private investor as a concession and had a running battle with the former Minister of Solid Minerals, Dr. Kayode Fayemi, on the issue.

In March, the House speedily passed two bills in a bid to stop the concession, advising the government to instead complete the plant as a going public asset.

The two bills, sponsored by 301 lawmakers, were, ‘A Bill for an Act to Provide for the Ajaokuta Steel Company Completion Fund for the Speedy Completion of the Project; and for Related Matters’ and ‘A Bill for an Act to Amend the Public Enterprises (Privatisation and Commercialisation) Act, Cap. P38, Laws of the Federation of Nigeria, 2004 to Review the List of Enterprises to be Privatised; and for Related Matters’.

But, on Monday, Bwari appeared before the Gbajabiamila committee to defend the government’s decision to give out the plant as a concession.

He said that the government could not complete the plant because it could not afford the cost.

The minister stated, “With concession, the government will not put more money, but will appoint a reputable transaction adviser to move forward. Right now, the government does not have the funds. It is important that we hand it over to those who have the resources.

“The government is even borrowing to run services. That is to tell you that there is no money.”

Bwari added that it would cost the government far above the $500m being reported as the amount required to complete the plant and run it.

He explained that the reported 98 per cent completion frequently quoted had to do with the plant only and did not cover external and pending internal works to be done before production would start.

But, members disagreed with him, saying the problem of the steel firm was the lack of political will by successive governments to complete it.

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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