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News_Naija
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News_Naija
Privatise Ajaokuta Steel Company Now!
~2.7 mins read
FOR over four decades, the Ajaokuta Steel Company in Kogi State has stood as a silent, rusting symbol of Nigeria’s consistently inept leadership. Sixteen presidents and heads of state have ruled Nigeria since the idea of setting up steel rolling mills as the fulcrum of Nigeria’s industrial future was conceived in 1958. 10 have been at the helm since the Ajaokuta plant was declared 98 per cent complete in 1984. Yet, it has not produced a single sheet of steel! Instead, it has consumed billions in public funds through maintenance, salaries, and legal costs. Nigeria imports over $4 billion worth of steel annually to meet its needs. Some of the Russian workers who erected the plant and chose to remain and died in Nigeria, waiting endlessly for the plant to start. The latest allocation of N6.21 billion in the 2025 budget for salaries underscores an absurd commitment to failure. That Nigeria continues to pay salaries and pensions to staff of a plant that produces nothing is textbook idiocy. This must end. Steel production contributes jobs and is a key economic driver, providing the basis for several industries including automobiles, shipping, railways, construction, manufacturing, and fabrication. Egypt produces about 10.6 million tonnes of steel a year, while South Africa records 4.9 MT per the World Steel Association. Japan depends on iron ore imports, but it produces 89 MT of crude steel annually. Nigeria, with over 3.0 billion metric tonnes of high-grade iron ore reserves, manages to produce 2.2 MT a year with scraps and billets imported mainly from China. Ajaokuta alone can produce 1.3 MT of crude steel, with the potential to scale to 5.2 MT. Yet, decades of political paralysis and insidious play by vested interests have kept the sector in limbo. President Tinubu must turn the tide if he is to stamp a legacy. Nigeria has wasted over $8 billion on Ajaokuta in the last 40 years. In 2022, the government paid $495 million to Global Infrastructure Nigeria Limited as an arbitration award for a dubious concession that was destined to fail. Between 2023 and 2024, N1.1 billion was paid as pensions and taxes for a non-functional entity. The financial haemorrhage is appalling. Every naira sunk into this industrial graveyard is a missed opportunity to invest in functional infrastructure, health, education, and productive, job-creating ventures. A complete and transparent privatisation of Ajaokuta is the only way to end this charade. Around the world, privatisation has transformed moribund or poorly performing industries into engines of productivity and economic growth. Brazil’s CSN became Latin America’s largest steel exporter after privatisation. South Korea’s POSCO, once state-owned, is now the world’s fourth-largest steelmaker. In Nigeria, the liberalisation of the telecom sector in 2001 ended the oppressive and inefficient monopoly of NITEL, created a $9.5 billion industry and plenty of jobs. Indorama Eleme Petrochemicals moved from operating at 25 per cent capacity to 100 per cent capacity within a year of privatisation in 2017. It went on to build the largest single-train urea plant in the world. Ajaokuta must follow the same path. The MoU was signed with Russia’s Tyazhpromexport, the original builders of the plant, in September 2024, and the commissioning of a comprehensive technical and financial audit of the steel complex and its key assets are steps in the right direction. The unknown forces that kept the company comatose for decades must not be allowed to derail this new process. Tinubu must make a firm commitment to follow through to the end. The GINL fiasco proves that half-measures and opaque deals ultimately do not work. Ajaokuta Steel’s privatisation must be conducted in clear and enforceable terms. Nigeria cannot achieve industrial self-reliance without domestic steel production. The government has no business running steel plants or any business at all. Its role is to regulate, not operate.
Read more stories like this on punchng.com
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Instablog9ja
Actor Kamo State Pens A Heartfelt Appreciation Note To Funke Akindele As He Welcomes His First Child With His Wife
~5.3 mins read
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Instablog9ja
VDMs Arrest: Verydarkmans Close Ally Wrote A Petition Against Him To EFCC Comedian Deeone
~3.1 mins read
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Instablog9ja
Nigeria Faces Budget Crisis As Crude Oil Prices Collapse
~3.4 mins read
Nigeria Faces Budget Crisis as Crude Oil Prices Collapse
Nigeria is facing serious economic headwinds as Brent crude prices fall below $60 per barrel, far below the $75 benchmark used for the 2025 federal budget.
With daily oil production also underperforming—averaging just 1.7 million barrels per day versus the budgeted 2.06 million—revenue projections are now in jeopardy.
The implications are stark. Nairametrics estimates Nigeria could lose up to N19.6 trillion in oil revenue if current trends persist. That loss could balloon the fiscal deficit from the planned N13 trillion to over N30 trillion.
Meanwhile, the naira has weakened past N1,600/$, overshooting the N1,500/$ rate used in the budget. As oil revenues decline, so does Nigeria’s capacity to stabilize its currency and balance its books.
The Central Bank of Nigeria (CBN) has intervened in FX markets using dollar reserves accumulated earlier this year, offering temporary relief. At the IMF/World Bank Spring Meetings, officials revealed Nigeria recorded $15.2 billion in net FX inflows in Q1, driven by reforms, diaspora remittances, and investor interest. Still, analysts warn that weak oil prices could limit the CBN’s ability to defend the naira going forward.
International observers are watching closely. JPMorgan’s Joyce Chang praised Nigeria’s reforms but warned that oil price volatility and rising global trade tensions, including new U.S. tariffs, pose renewed risks.
Nigeria’s limited influence in OPEC+ further complicates matters. Recent decisions to raise oil supply were led by Saudi Arabia and Russia, leaving Nigeria—already below quota due to infrastructure issues—on the sidelines.
Finance Minister Wale Edun has acknowledged the risks and confirmed that the government is adjusting its fiscal strategy. A task force is revising revenue assumptions, while NNPC has been instructed to increase output. Efforts to expand non-oil income through tax reform and digital revenue tracking are also underway.
Nigeria now faces a critical test of its fiscal resilience.
📝: @nairametrics
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