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FG Requires $1.21bn to Revive Ajaokuta Steel Complex

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Ajaokuta Steel
  • FG Requires $1.21bn to Revive Ajaokuta Steel Complex

The country requires a total of $1.21bn to put Ajaokuta Steel Company Limited, Nigeria’s integrated steel complex, into production, investigation has shown.

This amount is $813m higher than $400m needed to complete the steel complex 17 years ago when an audit of the complex was conducted by the government of former President Olusegun Obasanjo.

The new funds injection includes $513m required to complete the construction of the steel plant and $700m for external infrastructure.

The Ajaokuta project has so far consumed about $4.66bn. This includes the cost of the plant; the cost of an extensive estate known as the Steel Township; and that of the rail bridge across the River Niger.

The Sole Administrator, Ajaokuta Steel Company Limited, Mr. Isah Onobere, confirmed these figures.

To several experts, the Ajaokuta Steel Complex and its raw materials producing counterpart, the National Iron Ore Mining Company, Itakpe, best exemplify the nation’s wasteful culture and lack of vision and interest. Both companies are located in Kogi State.

While several countries that produce steel products do not have the core raw material, iron ore, Nigeria is blessed with iron ore deposits, not only in Kogi, but also in some other parts of the country.

With the abundance of iron ore deposits, Nigeria was supposed to be a cheap producer of steel products at the conception of both Itakpe and Ajaokuta.

However, the vision has since gone awry with successive governments neglecting or leaving the ASCL and NIOMCO worse off.

Within four years that the construction of Ajaokuta Steel Complex began, the plant had reached 84 per cent completion rate as the government of President Shehu Shagari counted it as the bedrock of Nigeria’s industrialisation.

Some workers at the complex, who had joined the company at inception, told our correspondent that Shagari used to visit the complex every month. But when, the military struck, the vision was kept in abeyance.

The worst happened in 1994 when the military junta led by General Ibrahim Babangida stopped the work entirely and sacked the Russian contractors, the TPE. The worse part of the story was that the plant then had attained 98 per cent completion rate.

Onobere, an engineer who joined the service of the company in 1982, said, “By 1994, when the Federal Government, owner of the plant, stopped funding the completion of the project, the plant was at 98 per cent completion status.

“The Vision 20:2020 economic blueprint document even goes beyond the rolling plant to envisage the actualisation of the third phase of the project, the 5.2-million-metric-tonne/per annum of liquid steel production.

“The plan takes into cognisance, the technical audits of the plant conducted by two reputable international firms in 2000 and 2010, Messrs TPE (original builders of the plant) and Messrs REPROM, respectively.

“Based on the TPE audit, a work schedule spanning 24-month duration and involving the injection of about $400m is the chief feature of the rolling plan.”

Rather than go through the process of completing the plant, the Federal Government under Obasanjo in 2003 gave the rehabilitation and management of the ASCL to an American firm, Solgas, as concession in a controversial transaction.

When it was clear that the company neither had the technical requirement nor the financial muscle to manage the steel complex, the concession was terminated and the complex was turned over to an Indian firm, Global Holding Infrastructure Limited, to manage for a period of 10 years.

Again, the concession crashed three years after as the Federal Government under the late President Umaru Yar’Adua terminated the agreement in 2008, accusing the Indian firm of asset-stripping.

This prompted the concessionaire to head for arbitration at the International Court of Arbitration in London. The case lingered until August 2016 when the Federal Government reached an out-of-court settlement with the Indian firm.

Under the agreement, Global Infrastructure Holding Limited will operate the National Iron Ore Mining Company Limited for a period of seven years as a settlement for renouncing any claim on the ASCL.

According to analysts, the economic costs of the vacillation of the Federal Government can be very enormous. One of such costs is the failure to create about 500,000 jobs in upstream, midstream and downstream industries envisaged in the first phase of the project.

Meanwhile, about 2,700 workers earn about N300m per month or N3.6bn per annum to keep the plant afloat without performing the real job for which they were employed.

Some Nigerians wonder why such a large number of workers would be paid from the treasury without the plant being put into production.

Investigation shows that without the work of these workers, the complex would have long gone into extinction as they perform some essential functions such as running idle capacity and dewatering the substructure.

Onobere said, “The blast furnace is the heart of the steel plant. The molten metal from the blast furnace is partly converted into steel at the steel making shop, and cast into blooms, ingots and billets.

“The balance is cast in to pig iron at the pig casting machine plant, with capacity of 155,000 tonnes per annum. Pig iron serve as the raw material for small and medium-scale foundries and steel making plants along the value chain.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

The Kenya Private Sector Alliance (KEPSA) and The Canada-Africa Chamber of Business Announce Major Memorandum of Understanding (MoU)

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The Kenya Private Sector Alliance and The Canada-Africa Chamber of Business are proud to announce collaboration to promote, support and facilitate bilateral trade and investment opportunities from Canada into Kenya.

The first engagement will be a virtual trade mission to Kenya from Canada in May.

The 3-year agreement MoU was signed today during the Second Session of the Binational Commission meeting between the Governments of Kenya and Canada – and is subject to ongoing renewal.

“This MoU will solidify the existing trade relations between Kenya and Canada and establish strong bonds between the two countries that will go a long way to boost private sector trade and investment. The MOU will also enable us to exchange business information with CACB which is critical especially to our members who wish to expand their coverage to international market,” explained Ms. Carole Kariuki Karuga, KEPSA CEO.

The Kenya Private Sector Alliance is the apex body of private sector in Kenya.

The Canada-Africa Chamber of Business is a 27-years old organization committed to accelerating trade, business and investment between Canada and Africa.

‘Nairobi is a vital gateway not just to Kenya and the region, but the continent’s economies of the future in Africa,’ noted Garreth Bloor, President of The Canada-Africa Chamber of Business.

‘KEPSA is world leader in the private sector, showcasing excellence on the global stage. This MoU is a great honour for The Canada-Africa Chamber of Business, our leadership, and all our members across Canada,’ says Deepak Dave, the organization’s long-standing representative in Nairobi and Chief Risk Officer at the African Trade Insurance Agency.

‘The joint intended results of the co-operation agreement between CACB and KEPSA seeks to increase two-way trade and investment between Canada and Kenya in all sectors – while laying the foundations to explore trade missions to Kenya by The Canada-Africa Chamber of Business and to Canada by KEPSA,’ said Sebastian Spio-Garbrah, Chair of The Canada-Africa Chamber of Business.

Guided by this MOU, CACB and KEPSA will work together towards on a case-by-case basis exploring events together, exchange of business information and reciprocity members of the Kenya Private Sector Alliance to enjoy the privileges of membership afforded to CACB members, and to ensure KEPSA members are well-positioned in the Canadian market for investment and trade in all sectors and that CACB members are well-positioned in the Kenyan market for investment and trade in all sectors.

“As KEPSA, we remain committed to establishing progressive business and trade partnerships with Canada and other similar minded parties for a mutual benefit of our members as well as those of our CACB counterparts,” said Ms. Carole Kariuki Karuga, KEPSA CEO.

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Economy

India, Spain, the Netherlands, USA, Nigeria’s Major Export Markets -NBS

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India, Spain and the Netherland top Nigeria’s export markets in the final quarter of 2020, according to the latest data from the National Bureau of Statistics (NBS).

The Commodity Price Indices and Terms of Trade Q4 2020 report showed that the United States and China trailed the three.

However, the NBS revealed Nigeria exports mainly crude oil and natural gas during the period under review.

It, “The major export and import market of Nigeria in Q4 2020 were India, Spain, the Netherlands, United States and China.

“The major export to these countries were crude petroleum and natural gas. The major imports from the countries were motor spirits, used vehicles, motorcycles and antibiotics.”

The bureau stated that the all-commodity group import index increased by 0.13 per cent between October and December 2020.

This was driven mainly by an increase in the prices of base metals and articles of base metals (one per cent), boilers, machinery and appliances; parts thereof (1.03 per cent), and products of the chemical and allied industries (0.75 per cent),” it stated.

The NBS, however, noted that the index was negatively affected by animal and vegetable fats and oils and other cleavage products.

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Economy

Onyeama: Qatar To Invest $5bn In Nigeria’s Economy

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The oil-rich state of Qatar is to invest a total of $5 billion in Nigeria’s economy, the Foreign Affairs Minister, Godfrey Onyeama, has disclosed.

Onyeama, who spoke Sunday at a send forth dinner in honour of Nigeria’s Ambassador-designate to the State of Qatar, who is also the outgoing Director of Protocol (DOP) at the State House, Ambassador Yakubu Ahmed, also stated that recent career ambassadorial appointments made by the gederal government was based on merit, experience and professionalism.

The minister further said there had been discussions with Qatar on partnership with Nigeria’s Sovereign Wealth Fund (SWF), for significant investments in the region of $5 billion in the Nigerian economy.

According to him, ‘‘Qatar is a weighty and strategic country and very strategic in that part of the world and we are putting our best feet forward to advance the interest of our country economically and in other areas.”

He recalled that President Muhammadu Buhari had visited the State of Qatar in 2016 and the Emir of Qatar, Tamim Bin Hammad Al-Thani, reciprocated with a State visit in 2019.

Onyeama also explained that only trusted hands with a track record of diligence, experience and professionalism in the Foreign Service were recently appointed career ambassadors by the federal government.

The minister said the appointment of Ahmed and other career ambassadors were predicated on posting dedicated and keen Foreign Service practitioners to serve as image makers of the country.

He said: ‘‘Ambassador Yakubu Ahmed is a dedicated professional with a penchant for rigour and detail. He is very capable and one of the best in the Ministry of Foreign Affairs. He is personable, affable, extremely friendly, dispassionate and objective.

‘‘He is going to head a very important mission, a very important country, reckoned to be one of the richest countries in the world, per capita, and there’s a lot we will be doing with the State of Qatar.”

Also speaking, the Deputy Chief of Staff, Adeola Rahman Ipaye, described the honoree as a ‘‘perfect gentleman, very even-natured and always well turned out’’.

Ipaye said he had no doubt that the newly appointed ambassador would serve the country well in Qatar, adding that: ‘‘We are further encouraged that when he completes this assignment, he would return to serve Nigeria in a higher capacity.’’

In his remarks, the Permanent Secretary, State House, Tijjani Umar, while congratulating the outgoing DOP on his appointment, lauded Ahmed for excellent service to the State House and the nation.

‘‘He served this institution and the nation with the deepest sense of responsibility and it is very important that we establish a tradition where the system appreciates those who have served it well and those who will continue to serve it well,’’ he said.

Umar urged the new envoy to keep very fond memories of his time at the Presidential Villa, assuring him of the prayers and goodwill of all the staff.

Responding, Ahmed thanked President Buhari for the great honour and privilege of making him his principal representative in Doha, Qatar.

The Ambassador-designate pledged to deplore his energy and skill to the promotion of the existing cordial relationship between Nigeria and Qatar, particularly in the areas of economic, political, cultural and consular affairs as well as other key areas.

Ahmed, who joined Nigeria’s Foreign Service in 1993, said during his years in public service he had learnt that ‘‘patriotism, selfless service, diligence, determination and perseverance will always result in the achievement of the desired objective’’.

According to him, these virtues would be his ‘‘watchword’’ in the pursuit of Nigeria’s foreign policy objectives and the attainment of national interests.

The Ambassador-designate singled out for appreciation the Chief of Staff to the President, Prof. Ibrahim Gambari, and the state Chief of Protocol, Ambassador Lawal Kazaure, saying he had learnt a lot working under their mentorship.

He expressed gratitude to the Minister of Foreign Affairs and the Permanent Secretary, State House for giving him the opportunity of a memorable work experience in the State House.

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