The 2024 federal budget has earmarked N4.45 billion for the Ajaokuta Steel Company, signaling the government’s commitment to revive the dormant steel mill. This allocation exceeds the N3.71 billion allocated in 2023, with over 90% of the budget dedicated to personnel costs, totaling about N4.3 billion. The remainder will be allocated to power, water, and equipment maintenance.
InfoStride News observed additional allocations beyond Ajaokuta Steel Company, including a separate N4 billion for the concession of the steel plant under the Ministry of Steel Development. The ministry also has a budget of N200 million for the revival of Ajaokuta Steel Company Limited (ASCL) and National Iron Ore Mining Company (NIOMCO).
In pursuit of the Ajaokuta Steel Company’s revival, the Minister of Steel Development, Shuaibu Audu, emphasized the need for approximately N35 billion in funding from financial institutions. This funding aims to jumpstart the Light Steel Rod Mill in Ajaokuta and initiate iron rod production. The minister outlined plans to collaborate with financial institutions to secure suitable funding solutions, as revealed during a meeting with a Stanbic IBTC Bank delegation in Abuja.
Audu highlighted the ministry’s agreements with the Works Ministry for rod offloading and the Ministry of Defence for constructing a military complex in Ajaokuta. He expressed optimism about the project’s potential and its alignment with the administration’s Renewed Hope Agenda.
In discussions with Stanbic IBTC Bank, the bank’s CEO, Wole Adeniyi, and Head of Industrials, Debola Seriki, conveyed the bank’s readiness to collaborate and sought additional information for project realization. Similar engagements occurred with senior executives from the United Bank of Africa and Voda Infrastructure Management Ltd to ensure prompt funding for sustainable growth in the Steel Sector.
Despite consistent budget allocations, Ajaokuta Steel Company has been inactive for over four decades due to unsuccessful government privatization and concession efforts. The 10-year concession granted to Global Steel Holdings Limited, an Indian company, was revoked amid allegations of asset stripping, leading to a legal dispute. The Federal Government paid $496 million to an Indian-Nigerian company in connection with the controversial concession agreement.
Undeterred by past challenges, the Federal Government remains steadfast in its commitment to securing a concession and revitalizing the Ajaokuta steel facility.
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