Emmanuel Ochayi
The National Assembly has increased the budget for the Ajaokuta Steel Company to N5.18 billion, aiming to breathe life into the plant after 42 years of dormancy.
However, concerns arise as the budget expansion includes unrelated community projects outside Kogi State.
Join our WhatsApp Channel“This increase reflects our commitment to reviving Ajaokuta Steel, but the inclusion of unrelated community projects has raised questions about the allocation’s focus,” stated a National Assembly representative.
More than 83% of the budget is allocated to personnel costs, raising eyebrows over the allocation’s efficacy.
The lion’s share, approximately N4.3 billion, will be dedicated to maintaining the personnel, with salaries alone accounting for N2.62 billion.
Amidst the steel plant revival efforts, seven new capital projects have been introduced in the approved budget. These include initiatives like supplying farm feed in Lagos and entrepreneurial development training in Kwara North, raising concerns about diversions from the steel plant’s core objectives.
Prime Business Africa’s analysis reveals that a portion of the new additions, notably N400 million, is allocated to solar streetlights in a single senatorial district, sparking questions about equitable resource distribution.
Apart from the Ajaokuta Steel Company budget, it is identified that additional allocations, including N4 billion for the concession of the steel plant, N200 million for revival efforts, and N800 million for transaction advisor services.
Despite consistent budgetary support, Ajaokuta Steel faces hurdles, with past concession agreements marred by controversies and legal disputes. The Minister of Steel Development emphasizes the need for N35 billion from financial institutions to jumpstart the moribund plant.
The Federal Government, undeterred by past setbacks, is forging ahead with partnerships, including one with a Chinese company, Luan Steel Holding Group, to repurpose Ajaokuta Steel for military hardware production.
The government aims to generate N35 billion locally for the project despite grappling with electricity debt.
