Nigeria: Ajaokuta Steel - Nexim Returns From Russia With a Deal

24 September 2019
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Caught in the midsection by relentless jabs of perennial crash in crude oil prices, the Nigeria economy is being frantically steered out of a looming disaster of compromised earnings in foreign exchange which she desperately needs to stabilize the economy and make life meaningful for the citizens . Imperative to this urgent initiative is the government's sudden realization of the need to explore the abundant opportunities in the steel sector which offers a leeway for the nation's industrial revolution.

To demonstrate its resolve in this direction, the government placed special recognition on Nigeria Export and Import Bank (NEXIM) as strategically relevant to the entire gamut of its non -oil revenue drive. This accounts for why the agency is positioned as active contact point and supported with policy instruments as a very critical component of economic diversification initiatives.

Conceived at inception to be the bedrock of the nations' ambitious industrialization plans, the Ajaokuta steel complex after several years of successive leadership's misplaced priorities, poor vision and lack of planning may yet be what it was envisioned to be. Thanks to the renewed interest on the project by the Buhari regime for inspiring a fresh piece of imagination on alternative funding option for the completion of the project. This all-important piece of imagination breathed a ray of Hope on 18th to 22nd of June 2019, when the African Import-Export Bank (AfriEximBank) under the leadership of Nigeria's own Prof. Oramah, held its 26th Annual General for the first time in Moscow, Russia. NEXIM, its Nigeria version filed out its MD, Mr. Abubakar Abba Bello and the corporate services Director, Bala Bello to represent the government

Several efforts of back channel diplomacy and honest deliberation by the Nigeria delegation gave Ajaokuta a new lease of life. The Russia Export Center (REC) -a developmental institution established by the Russian government to export financial and technical support for foreign countries in need) signified its interest to be a stakeholder in AfriEximBank , committing $50billion towards African projects specifically in areas of mining, railway and major industrial development. Out of this fund -Nigeria is to receive $1b funding from REC'S $50billion stake in AfriExImBank to finance the completion of the Ajaokuta Steel Complex. Nexim which had been active partners with the latter is to collaborate with other relevant agencies to begin the process of receiving this fund.

Knowing our history, Nigerian presidency is bent on working on a direct Government to Government agreement between President Buhari and Valdmin Putin in October in Russia with regards to the revival of Ajaokuta now that the funding challenge has been sorted out.

Those who still believe on privatization of the steel complex should remember that On the 2nd of April 2019, President Buhari rejected the $1b Ajaokuta Steel Company's completion bill passed by both houses of the national assembly stating amongst others that "the nation cannot afford to commit such humongous amount in the midst of competing priorities ".

Financing was a major source of concern for a project of this magnitude which though if properly operated portends immense benefit for the nations' industrialization dream. The option left and actively canvassed by familiar voices of desperation was for the nation to settle for priviatisation with all its sorry and sordid tales of the past. Many government enterprises have suffered greatly in the guise of privatization. The hawks around successive political leadership mostly driven by self interest in acquiring national asset at give away prices offer an option that is consistent with the corruption narrative which stymied Privatization schemes in the past. Privatization in Nigeria context is simply an excuse for manifest cronyism and political patronage at the expense of transparency and patriotism in glaring display of inefficiency. There is no better grasp of privatization in the Nigeria environment than to attempt a glimpse into the fate of some government enterprises that were led into the chopping board of privatization by the same corrupt elite and a wavering political leadership. In the bid to nudge the government into privatization their hirelings in the media and corrupt professionals in the private sector play pranks with public sensibility in preaching the gospel of privatization. They regale us with boring tales of how it has worked in other countries and the need to key in to the global trend. Curiously however, they avoid telling us the bitter tales of privatizations in Nigeria and what has changed in the attitudes of the capitalist leeches around the power loop to make it an attractive option for the Ajaokuta project. It is in recognition of this inherent danger that the national assembly passed a bill delisting Ajaokuta from the list of enterprises for privatization. Evidence abound that public utilities like N.E.P.A, NITEL AND others privatized by past administrations were mere favors to cronies whilst the process was severely impaired by lack of transparency. As such, expected improvement or positive results in terms of economic gains and services would be asking too much of the scheme. Many abandoned projects are legioned across the nation which according to the Chartered Institute of Project Management of Nigeria, have risen to 56,000 projects valued at N12 trillion. These are sufficient painful reminders of how not to attempt any step on privatization in Nigeria until we have sorted ourselves out this mess and aligned our approaches to established norms and protocols in civilized climes. Government is currently on the verge of buying over the invested funds in the power sector to take possession from those who should never have had any business with such a very vital public asset and engage those with the right technical know -how, financial muscles and experience. People with appalling lack of ideas, uninnovative and lacking in vision do not finagle with state enterprises

President Buhari should push forward forcefully along the line he has chosen and shelve the idea of privatizing ASCL/NIOMCO Itakpe. This position aligns with the resolution of the 8th National Assembly and the generality of Nigerians who are only too aware of the mess created by previous administrations under the guise of privatization. The outside world is not blind to our wasteful ways -they have accurate records and rich history of our self -impose imperfections in handling delicate matters with heavy financial implication and projected beneficial social impact. The option the president is pursuing brings us face to face with established best practices on the world stage which frowns at possibility of strange hands with passion for cutting comers and taking advantage of the system. We only need to be reminded that the country is presently locked in a debt judgment suit on a failed gas project. AfriExImBank would release funds to revive Ajaokuta but would prefer do so by direct Government to Government engagement.

Afrieximbank as a pan-African multilateral trade finance institution has enduring parallel vision and relationship with NEXIM rich enough to tightly secure , consolidate this huge life-saving gesture from Russia by serving as trusted contact points in the government to government dealing with Russia to Facilitate the nation's steel Industrialization project.

Mohammed Nuru Yakubu

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