FG Allocates N6.21bn For Salaries Of Moribund Ajaokuta Steel Workers

The Federal Government has budgeted N6.21bn for salaries of workers of the moribund Ajaokuta Steel Company next year, according to the proposed 2025 budget.

This is an increase of N1.92bn or 44.76 per cent from the N4.29bn allocated in the 2024 budget 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.

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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.

However, 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 so far.

Despite its inactive status and reports of an ineffective workforce, the company continues to receive substantial annual budget allocations from the government.

Recall that the Federal Government paid workers of the moribund Ajaokuta Steel Company the total sum of N38.9bn as salaries and allowances in 10 years.

When the 2025 budget is approved, the Federal Government will have budgeted a total of N45.11bn for the moribund steel company in 11 years.

A breakdown of the company’s annual budget between 2014 and 2024 showed that a total of N29.11bn was budgeted in salaries and wages, and N9.8bn in allowances to its staff.

Further analysis revealed that the government budgeted N3.82bn for personnel costs in 2014, which was 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 was allocated 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.

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 that being an indigene of the area and desirous of getting 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 visits I’ve made to the complex, hardly 10 people were 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.

Personnel costs made up over 83 per cent of the N5.18bn budgetary allocation for Ajaokuta Steel Company.

For the 2025 budget, personnel costs accounted for 91.19 per cent of the N6.81bn allocated to the firm.

The Federal Government budgeted N233.63m for overhead costs and N366.86m for capital expenditure for the firm next year.

It was observed that the Ministry of Steel Development planned to spend N2.41bn on project preparation for investment mobilization for Ajaokuta Steel Company Limited in 2025.

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The ministry also budgeted N250.98m to revitalise Ajaokuta Steel Company Limited and the National Iron Ore Mining Company.

At a briefing earlier this year, 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.

The Federal Government of Nigeria, through the Ministry of Steel Development, also signed a Memorandum of Understanding (MoU) with a Russian consortium for the rehabilitation, completion, and operation of the Ajaokuta Steel Company Limited and the National Iron Ore Mining Company.

The consortium, including Messrs Tyazhpromexport, Novostal M, and Proforce Manufacturing Limited, will spearhead the project to revitalise the steel industry in Kogi State.

However, experts earlier insisted that the best option was to privatise the company to effectively maximise its potential.