By Jimoh Babatunde
The Federal Government has been urged to adopt the model used by the Peoples of the Republic of China to transform its Steel industry in the resuscitation of Ajaokuta Steel Company.
The Chairman Basic Metal, Iron and Steel and Fabricated Metal Products sector of the Manufacturers Association of Nigeria (MAN), Dr Kamoru Yusuf, who gave the advice, said no foreign investors can bring Ajaokuta Steel Company back to operation.
He said the process of resuscitating Ajaokuta Steel Company which is our nation’s heritage was not properly structured as owners of existing steel plants, who would have given clearer narrations of the issues in the industry, were not consulted.
“What the Chinese Government did was to indigenize one of the country’s major industries – the Iron and Steel, into the hands of their people with the Government holding only 25% interest while local investors were allowed to own 75% stake.
“This created opportunities for the local investors and ensured that the wealth remained within the country-China, without repatriation of capital as well as dividends; thereby leading to the development of local skills and other multiplier effects that finally resulted in what the world is witnessing today as the industrial explosion in China.
Yusuf urges Nigerian government to redirect its policy as it is obvious that the commercial interest of the offshore investors does not match the developmental interest of the Government of Nigeria as well as the industrial aspiration of her citizens.
“Any attempt to invite foreign investor(s) to resuscitate the Ajaokuta Steel Company will result in the said foreign interest depriving us of our national heritage; as any proceed realized from the sales, will be repatriated by such interests to their countries and would consequently have negative effects on Government’s policy of backward integration and the corresponding objective of conserving the scarce foreign exchange with dare consequences on the current and future well-being of our economy.
“It is only indigenous investors that can make it happen so that the procedure can remain here in Nigeria and we can re-invest this into the economy. This we have all seen, was the case in the cement industry and with Nigeria now taking another giant stride in refinery and petrochemicals.”
Yusuf believes to turn around the fortune of the steel sector is to channel the Comprehensive Import Supervisory Scheme, CISS, charges paid to the Nigeria Customs Service, NCS, to providing bailout and support to the steel sector.
“Such money should be utilized to drive the industrial revolution process that will galvanize national industrial development.
“There will be no reason for the Government to borrow money to bring Ajaokuta back to life. We have the resources as a nation and we also have experts who can make it work. We don’t need foreign investors to do it. Ajaokuta can be back again to produce machines that are needed by other steel industries in their production processes.
“You will agree with me that with the gigantic size of Ajaokuta, the complex should not focus on the middle-steel production, which is massively available around Nigeria and West Africa. Rather, it should focus on the configuration of a high-class production of steel products such as Slab Caster, Hot Rolled Coils and Plates, and Foundry for the production of the required machinery and tools in the country, since 50 per cent requirement for this high-class configuration is already available in Ajaokuta.”
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