Port Harcourt — President Muhammadu Buhari has been advised to tread cautiously with the planned privatisation of critical national assets such as the National Iron Ore Mining Company, NIOMCO and Ajaokuta Steel Company Limited ASCL, to foreign companies.
South-South Coordinator of the Institute of Chartered Economists of Nigeria, ICEN, Friday Nathaniel Udoh, who gave the advice, expressed fears that if these critical assets are left in the hands of foreign firms, Nigeria’s national economy and security will be at risk, as well as the country’s potential in global steel market would be undermined.
Udoh defined critical infrastructure as those facilities, supply chains, information technologies and communication networks which, if destroyed, degraded or rendered unavailable for an extended period, would significantly impact on the social or economic well-being of the nation.
He advocated that the companies who built these plants, such V/O Tiajpromexport, a Ukrenian firm under defunct Soviet Union, along with Voest Alpine Industry GmbH, Austria and Messrs Ferrostaal Industry, Germany would best deliver the project in terms of quality and time given its in-depth understanding of the plant
“The national competitiveness will be compromised (the social, economic, political and security system undermined) concessing or privatizing these critical and key assets- the Ajaokuta Steel Company Limited and the National Iron Ore Mining Company, to foreign companies is considered a misdemeanour following the fare-aching consequences on national security.
“Mr. President subjecting NIOMCO to either Public Private Partnership contractual regime or outright Privatization to a foreign controlled enterprise or local company with a strong influence of foreign companies’ and especially domiciled in a particular country is susceptible to dishonest conduct; an unprecedented threat to the economy and Security in any given time and deserve special attention.
“Sustainable re-engineering of ASCL will cost the country between $480million to $750million with the available technology even as I do not subscribe to FESTMELT technology promoted by Kobe Steel Ltd, Japan which estimate is more than double a cost of reactivating the entire ASCL plant.
“Mr. President, it is not a stale story that NIOMCO as well as ASCL occupied a critical node in the nation steel industry vis a vis critical position in the nation development.
“The questions here are: Do we allow our quick fix disposition drown our economic pursuits? Again, should we assent to the voices of the concession or privatization proponents over these two critical assets which have potential to undermine our competitiveness in the global steel market?
“Considerably and in most cases such deal might not favour Nigerians companies’ against the financial involvement. And the third question is: what impact and if the plant are given out to foreign controlled firms, significantly how will it impact the risk, vulnerability and resiliency of the nations steel industry and Nigeria’s economy?”
The Chartered Economist said NIOMCO and ASCL are critical infrastructures and must be treated as the entire country’s assumed great liability when compromised, making it possibly for unprecedented cost on Nigeria economy. In like manner it becomes important to protect the source nodes that these two firms assume in Nigeria steel industry.
“Mr. President, Nigeria like every sovereign state, we ought to balance the open markets- windows in respect of Foreign Direct Investment with the country’s security interests. Achieving this balance call for a shift that culminates in placing certain restrictions on overseas investment, especially in strategically sensitive sectors whose incapacitation or destruction could have a deliberated effect on economy of course the national security.
“The proponent of privatization or concession under whatever concepts, for them might not seem pleasant and doesn’t look an umpteenth time, for me Mr. President, to ossifying my position against sales of these two critical assets rose on, and deserves your utmost attention.
“No doubt, acquisition of the country’s Critical Assets and Key Resources presents an unprecedented threat to Nigeria’s National Security, especially when the foreign entities’ decisions is woven, forming an extension of its home government’s policy tool than the company’s commercial concerns and the political motivated decision of Kremlin’s conglomerate, Gazprom disrupting gas supply to Ukraine that affects UK as well is neither a fat but fact.
“ASCL and NIOMCO by designed were meant to serve the Delta Steel Company Aladja, near Warri in Delta State. The Oshogbo, Jos and Katsina, Qua Steel rolling mills in Eket were conceived to be sustained by ASCL and DSD, Warri. Especially the latter is since closed shop as the rest hardly operate 20 per cent installed capacity.
What’s more is for government to extend incentives to the DSD and the rolling plants in the country having been privatised for optimal operation.”
On the way forward, the Economist said a Critical Infrastructure and Key Resources (CI&KR) Bill must be initiated either through Presidency or by the National Assembly, to strengthen the government’s ability at protecting CI&KR against sabotage, cohesion, politically motivated decisions etc.
He said the legal meaning of national security must be expanded to include critical infrastructure and Key Assets, as well as the finance made available for the upgrading of ASCL and NIOMCO in order to prepare the plants for operation before full privatization program.
“Legislation for oversight body with responsibility to investigating all foreign investment deals in which the overseas entity is owned or controlled working along with the Federal Competition and Consumer Protection Act signed into law on 30 January 2019, the Securities and Exchange Commission and the Bureau for Public Enterprise.
“Given the soft stance of the Government over Aluminium Smelter Company of Nigeria controversial privatization; into avoiding class lawsuit or whichever for preservation of the country’s judiciary sanctity, more importantly the reputation and the goodwill representing veritable and valuable assets are too dangerous to be desegregated.
“BPE should be mandated to draw out a program that allows the 36 State Government including Abuja, the acquisition of the stakes in ASCL and NIOMCO plants while money could be deducted from sources and the States not disposable to the arrangement can be opted out and whichever states that needed to increase it share can do so.
“A research pact be entered by the government among three Nigerian Universities, especially University of Nigeria Nsukka, University of Port Harcourt and the Federal University of Science and Technology Owerri, and grant for a research on how to process coal deposits in the country to meet technology available at the Ajaokuta Integrated Steel plant for its sustainably operation.”