A Review of the Nigerian Energy Industry

Steel stakeholders blast Kogi gov, others over “fraudulent” plan to acquire Ajaokuta Steel company

*Ajaokuta Steel Company.

…Say steel firm not ready for privatisation
…Call for expulsion of Indian-owned GIHL for economic sabotage

Oscarline Onwuemenyi

30 June 2017, Sweetcrude, Abuja – Critical stakeholders and unions in the nation’s steel industry have urged the Federal government to immediately intervene and stop a plot by the Kogi State Governor, Alhaji Yahaya Bello, and one Alhaji Musa Bello, to acquire the Ajaokuta Steel Company Limited (ASCL) through dubious means.

The stakeholders include the African Iron and Steel Association (AISA), Nigerian Metallurgical Society, the Metallurgical, Mining and Minerals Division of the Nigerian Society of Engineers (NSE), the Industrial Global Union, the Iron and Steel Senior Staff Association of Nigeria (ISSSAN), as well as other groups representing host communities and youths of Okene and Ajaokuta in Kogi state.

They further contend that ASCL was not ready for concession, even as they urged the federal government to fund the completion the steel plant as a national infrastructure project, as well as rehabilitation of completed commercially viable units and unbundle the latter into industrial enterprises such as downstream unit, utility unit, lime and refractories unit, machine tools complex, amongst other uses.

The stakeholders indicated that the processes that had led to the choices of past concessionaires have been faulty and have produced such groups as the Global Infrastructure Holding (Nigeria) Limited (GIHL), which have not advanced the cause of industrialisation in the country.

Speaking on behalf of the group at a press conference in Abuja, the Executive Secretary-General of the African Iron and Steel Association (AISA), Dr. Sanusi Alhaji Mohammed, said the group had watched with concern the rape and destruction of the nation’s steel industry for many years, noting that all efforts to advise government on the right steps to resuscitate the sector had met with deaf ears.

He said that “recent moves by certain individuals with questionable motives to take over the ownership of the Ajaokuta Steel Company through dubious means, however, has necessitated that we make this appeal and urge the Federal government to quickly intervene before we lose everything that we cherish, and lose our entire economy.”

He added that, “As stakeholders in the nation’s steel sector, we are deeply worried and concerned that for almost 25 years, with only 2 percent short of completion of the Ajaokuta Steel Company Limited and other steel industries, Nigeria has been denied the numerous benefits of these unique industries due to the concerted efforts of some insincere and dubious individuals and companies determined to kill the steel industry.”

According to Mohammed, on the day the Acting President, Prof. Yemi Osinbajo, and the Minister of Mines and Steel development, Dr. Kayode Fayemi were signing the “Modified Concession” agreement for the National Iron Ore Mining Company of Nigeria (NIOMCO), Itakpe, in August of 2016, a certain Alhaji Musa Bello was having a party at the Abuja home of the Kogi State Governor, Yahaya Bello, where they celebrated their secret acquisition of the Steel company from Mr. Pramod Mittal of GIHL.

“These individuals, thereupon, proceeded to register a company with the Corporate Affairs Commission (CAC) called Ajaokuta Kogi Nigeria Limited, through which they are planning to swoop in and acquire the Ajaokuta Steel Company, which would make them effectively the sole owners of Nigeria’s entire steel industry. This is a dangerous development for the sector and for Nigeria’s economy,” he stated.

He added that the secret deal between the governor, his friend and Mr. Pramod Mittal, has equally emboldened the Indian to come back to the Acting President and Minister of Mines and Steel Development a few weeks ago to make further unreasonable demands, claiming that his company would not concede the ownership of ASCL to the Federal government until those fresh demands are met.

“In addition to NIOMCO, Itakpe, which was conceded to Mr. Pramod Mittal’s GIHL by the federal government in the modified concession agreement in August 2016, the Indian firm came back to the government to demand that they be allowed to take charge of the Delta Steel Company, the Warri Port, and Itakpe-Ajaokuta-Warri rail line which is under construction.

“The Itakpe-Ajaokuta-Warri rail line and the Warri Port are vital infrastructures for the smooth of both the Ajasokuta Steel Company and the Delta Steel Company for the movement of raw materials. We believe this is a retrogressive step to deny the country her steel freedom,” he stated.

Dr. Mohammed further decried the actions taken by the Minister of Mines and Steel Development, Dr. Kayode Fayemi, to re-concession the NIOMCO to the GIHL, despite numerous reports and petitions showing gross mismanagement and blatant rape of the industries by the company.

On his own part, the National President of Nigerian Metallurgical Society, Engr. Benjamin Adewuyi called for the expulsion of the Global Infrastructure Holding Limited (GIHL) from the country for economic sabotage.

He stated that “We are requesting the Economic and Financial Crimes Commission to make public the report of its investigations into the activities of the GIHL, which was ordered by the administration of late President Musa Yar’Adua.

“The then-federal government had deemed it necessary to investigate the operations of the Indian-owned company after it was observed that instead of investing the billions of naira as promised, GINL had embarked on a massive borrowing from Nigerian commercial banks to fund its operations.”

He added that “Till today, there is no record of how much was taken out of the company by GINL on their ill-fated mission to destroy Nigeria’s steel industry.

“Generally speaking, the following questions are begging to be answered: is it true that the Share Sales Purchase Agreement (SSPA) between government and GIHL in respect of Ajaokuta Steel Company Limited, was never in force, and that the summary of statutory obligations outstanding against GIHL was put at N350 million?

“That instead of investing external funds on the completion of both projects as expected, GIHL embarked on massive borrowing from local commercial banks, pledging the assets of the Delta Steel Company as collateral? That GIHL is owing the banks about $192 million? What is the total amount borrowed by GIHL and how much was actually utilised locally, how much was taken out by the company? How prepared was GIHL to take over the Steel companies?”

Adewuyi noted that the NMS “is generally dissatisfied and totally against any negotiation with GIHL until the true owner of the company is established and are made to provide answers to the issues raised above. It is obvious that GIHL has been lacking in their responsibilities hence government should not hesitate therefore to make GIHL vacate the NIOMCO plant and the country

“GIHL and any other Indian companies in the country that had in the past connived with dubious Nigerian businessmen to carry out nefarious and detrimental economic activities to kill our economy should be shown the way out,” he added.

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