The recent statement on Ajaokuta Steel Company by Alhaji Aliko Dangote did not come as a shock to me, but let him and others who hold similar thoughts in respect of the revival of Ajaokuta be reminded that the integrated steel complex in Ajaokuta can work and contribute immensely to national stability, wellbeing and enhance the welfare of the citizens.
Steel production has played and continue to play significant role in the advancement of industrial development of the top worlds for centuries. No nation has abandoned its steel industry except Nigeria. And this has contributed to our current set back in all areas of our national life.
The effects are numerous but not limited to areas such as poor revenue generation, import dependency, unemployment crisis and stifled industrial space.
Ajaokuta Steel was designed to address our national industrialization dream that has remained stagnated since the incursion of the military into our political governance.
Let’s peep into steel sector and its impact as factor in terms of development in most of the advanced worlds;
1. USA: The American iron and steel industry is said to form a dynamic part of the US economy, contributing for more than $520 billion in economic output and nearly two million jobs. For instance, while 59.4m tons of steel was produced in 2009, this rose to 87m tons in 2021, thus generating over $70b in 2009 and about $110b in 2021. The steel sector help the US in their military uses such as the production of strategic aircraft carriers, nuclear submarines, armour plates for tanks, patriots and stinger missiles etc.
2. RUSSIA: To address the Russian steel sector’s low technological level and competitiveness, in 2009 it announced a program titled, “Strategy for Development of the Metallurgical Industry of Russia until 2020”. The Russian Federation total steel production in 2021 stand at 76 million tons, making it the 5th World producer of crude steel. This was achieved through its huge investment of about $31.6 billion on the steel industry between 2001 to 2021, a period of 20 years. The single investment on the steel sector in 2021 alone was $3 billion. The return on equity for the Russian steel sector is said to be between 23.5% and 31.4% respectively thus making it a profitable investment, and a major contributor to national stability and economic growth. The Russian projection for the steel sector for its market overview between 2024 to 2028 is $75 billion.
3. THE EU: The EU on the 11th June, 2013 adopted a strategic Action Plan for their steel industry in view of the importance of steel development to their economies and the various challenges that confronted the day to day operation of these plants across the EU. About 24 out of the 28 members of the union are steel producing economies, and these includes Germany, Italy, France and Spain etc.
4. INDIA: In 2016, India designed what it called, the Domestically Manufactured Iron and Steel Products (DMI & SP) Policy aimed at enhancing their steel sector. The India’s steel development policy was aimed at achieving 300 million tons of steel making capacity by 2030 with additional investment proposal of Rs 10 lakh Core by 2030-31. India’s current crude steel production is about 107 3 million tons as of November 2021.
5. CHINA: The steel sector employed millions of Chinese people in its workforce. China is the global leading steel producing nation today with about 1,337 million tons of steel and 95% of its production consumed locally.
6. SOUTH KOREA: South Korea in 2022 plannedto create a $115.9 million low carbon support funds for its steel industry development strategic plans.
7. In Africa, we have countries such as Egypt and South Africa that are listed amongst the global steel producing nations. Egypt, for instance in 2022 exported steel worth about $1.26 billion.
Finally, with the current global crude price of about $924 per ton, Ajaokuta at a full production capacity of 5 million tons could have been generating about $4 billion into the Nigerian economy annually.
This is what we’re loosing as a nation. And this is what capitalists representatives are aiming to take over by throwing the statement into the sky to effect that Ajaokuta Steel cannot produce anything, so they can take over.
Other benefits are in legion, and these includes the impact the revival of the plant could have on our dead automobile factories, and other strategic concerns such as the Defense Industrial Corporation based in Kaduna. Remember, that the nation has been in a constant construction of roads, housing and the need to address the rising unemployment issues. These are part of the benefits of a working Ajaokuta Steel, and including all our household basic needs that have steel as its essential components.
*THE WAY OUT*
a) Outright privatization should be jettison. Instead, if partnership becomes inevitable, government should maintain a substantial percentage of holdings in view of the strategic importance of steel to national development.
b) The Russian Federation be invited to complete Ajaokuta instead of looking for new partners from the West that are hell bent in ensuring that a nation like ours should not be equipped with steel production.
c) A Special Fund be set up by the Federal Govt in order to facilitate the revival of the steel company.
Thanks
Abdullahi A. Bello
is a former Acting Governor former Hon Speaker of Kogi State, and currently a Ph.D student at the Institute of Governance and Development Studies, (IGDS)
Nasarawa
State University Keffi.