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Ajaokuta Steel Turn Around: Matters Arising

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The recent statement
from the Minister of Solid Minerals, Dr Kayode Fayemi, about the decision of the present administration to revamp the Ajaokuta Steel Company Ltd., is inspiring and promising.
Industrialists opine that the completion of the moribund plant will accelerate the desire of Nigeria to become one of the 20th economies of the world by 2020.
They recall that the idea behind a steel project in Nigeria started in 1958 when the colonial administration inaugurated a feasibility study on iron ore deposits in the country.
In 1967, a United Nations Industrial Development Organisation survey identified Nigeria as a potential steel market which led to the signing of a bilateral agreement between the defunct Soviet Union and Nigeria.
Further to this, in1971, an extra-ministerial agency — the Nigerian Steel Development Authority —was established by Decree No.9 to actualise the establishment of a steel plant in the country.
The actual work on the Ajaokuta Steel Company began in 1979 during the administration of Alhaji Shehu Shagari and as at 1983 the work on the plant had reached 95 per cent completion.
In spite of this level of completion, the plant had suffered years of neglect under successive administrations.
Although former President Olusegun Obasanjo’s conceded the plant to Global System Steel Holdings Ltd., an Indian firm, the concession failed to revive the company.
The present status of the plant notwithstanding, Fayemi said that the Buhari’s administration was passionate about the completion of the steel project.
He spoke after a fact finding tour of facilities at the company and the National Iron Ore Mining Company (NIOMCO), Itakpe, Kogi State, assuring the public that the Federal Government would soon unveil a comprehensive blueprint for the completion and rehabilitation of the two companies.
He said that the administration was taking a holistic look at the steel plant project to ensure its completion for the benefit of Nigerians.
“I want to let you know that the president is very passionate about the Ajaokuta Steel Company; we will take a look at the company holistically to make it work for the benefits of Nigerians.
“We are looking at the entire steel complex. We are not going to segment the plant. We are told that the captive power plant has been reactivated,’’ Fayemi said.
He said that government’s decision had become imperative due to dwindling fortunes of the oil sector.
According to him, the government will come up with realistic decision that will enable it to turn around as a foundation for future industrialisation of the country.
Fayemi said that government had obtained necessary information about the two companies from relevant stakeholders, noting that the facility tour was to authenticate the information.
The minister said that government was studying the experiences of steel producing countries to chart a way forward on Ajaokuta Steel Company.
“We are studying how these countries succeeded in building several plants many years after we have started our own.
“What did they do right and what we did wrong to find ourselves at the present situation; the plant will work, President Buhati is very passionate about it,’’ he said.
Irrespective of the minister’s speech, Mr Joseph Ononere, the Sole Administrator of Ajaokuta Steel Company Ltd., urged the government to call for expression of interest from experts for the rehabilitation, completion and inauguration of the steel plant.
He observed that no significant progress was made to turn around the fortunes of the company since 1994 when the Russians, being the original designers of the plant, pulled out of the project.
He pleaded with the Federal Government to ensure timely completion of the plant, saying that the minister’s visit after few months in office was a clear demonstration of government’s good intention to complete the project.
At Itakpe, NIOMCO Sole Administrator Yau Ibrahim solicited the support of the minister in the completion of some ongoing projects in the complex which he said were critical to the survival of the plant.
He stressed the need for the Federal Government to bring the case involving Ajaokuta Steel Company and NIOMCO at the Industrial Court of Arbitration in London to early conclusion.
He said that iron ore deposit at Itakpe was about 197 million tonnes which he observed would be sufficient to support production of steel at Ajaokuta Steel Company for 35 years.
“Beside the iron ore deposits at Itakpe, there is also iron ore reserve of about 60 million tonnes at Ajabanoko which is only six kilometres away from Itakpe,’’ he said.
Mr Bello Itopa, a representative of the Iron and Steel Senior Staff Association of Nigeria and Steel and Engineering Workers Union of Nigeria, pleaded with the Federal Government to act fast in revamping the company.
He said that no nation could attain economic stability and real industrial and technological advancement without massive investment in the steel sector.
To revamp the company, Mr Sanusi Mohammed, Secretary-General, African Iron and Steel Association, observed that about 1.1 billion dollars would be required.
“If the fund is released, Ajaokuta rehabilitation can be completed within three years including the external infrastructure.
“If 300 million dollars could be released from the amount required, it could be used to rehabilitate part of the company for mini production to begin,’’ he said.
He noted that 43 smaller companies with different areas of specialisation were located in Ajaokuta complex.
“If government can invest 300 million dollars for a start on Ajaokuta Steel Company, at least 25 out the 43 companies will begin operations on materials for producing cars.
“Some will produce railway steel, flat sheet and bitumen, among others. The fund generated by these 25 companies could be used to complete Ajaokuta Steel Company,’’ he said.
He recalled that the challenges facing Nigerian steel companies could be traced to lack of political will and mismanagement by the past administrations.
But Fayemi insisted that the Federal Government would not allow “international conspiracies to hinder the revamping of Ajaokuta and other steel industries in Nigeria.
“I do not want to believe that Ajaokuta cannot be viable if money is spent on it.
“International conspiracy did not stop China from becoming steel giant and India from advancing its steel industry; nothing can stop the revamping of Nigeria steel industries.
“We are the architect of our own misfortune; no international conspiracy can stop a determined nation from realising its visions and objectives’’.
He said the amount quoted to revive Ajaokuta Steel Company was exorbitant that Nigeria would need financial support to be able to produce liquid steel and other steel products.
He also said that if Nigeria began the production of steel, it would reduce foreign exchange being spent on steel importation and also create jobs locally.
He insisted that the president had saddled his ministry with the responsibility of reviving the steel industries in the country.
All in all, industrialists plead with the current administration to incorporate the original designers of the plant in its renewed efforts to revamp the company.
According to them, if the present administration revamps the steel plant, it will boost the country’s revenue.

Adamu writes for News Agency of Nigeria.

 

Sani Adamu

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Paper Industry’s Economic Contribution Hits N398bn

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The contribution of the paper industry rose to N398.8billion in 2023 from N356billion it recorded in 2022.
Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Musa Yusuf, disclosed this in a report released to mark the inauguration of World Envelopes Day in Lagos.
Marking the event, which also commemorated the 50th anniversary of envelope manufacturing firm, FAE Limited, Yusuf stated that the paper industry has a profound economic impact across all sectors of the economy.
He, however, noted that the growth in digital technology had greatly disrupted the sector, especially as a mode of communication.
“As of 2023, the value of the Nigerian paper industry was N398.8billion naira, according to the National Bureau of Statistics.
“The value was N365bn in 2022; N363 billion in 2021; and N255billion in 2020. This is a significant contribution to our GDP. However, when compared to the size of our economy, which is estimated at N230trillion as of 2023, it is still very small”,  the CPPE boss stated.
Yusuf said the paper industry had been largely in recession because of the digital technology disruptions and other macroeconomic headwinds, especially relating to exchange rate depreciation, forex liquidity crisis and high cost of fund and energy cost escalation.
He emphasised that the paper industry had a profound economic impact across all sectors of the economy, which underscored the need for government intervention in the sector.
In her opening remarks, the Managing Director of FAE Limited, Funlayo Bakare, described World Envelopes Day as the brainchild of the company, which sought to set aside April 16 as a day to celebrate the fundamental role envelopes play in daily communication.
“As we celebrate our golden jubilee, we are delighted to announce the inauguration of World Envelopes Day, to be celebrated annually on the 16th day of April.
“This is a pioneering initiative by FAE Ltd in accordance with our leadership position in the sector.
“The establishment of World Envelopes Day is to raise awareness about the importance of envelopes in various aspects of human endeavour, including personal correspondence, business transactions, and creative expressions”, she said.
The Publisher of The Guardian Newspaper, Maiden Ibru, who chaired the occasion, stressed the need to strike a balance between digitalisation and physical paper production, especially due to the indispensable role paper plays in cultural preservation.
Nigeria once had three paper mills: the Nigeria Paper Mill Limited, located in Jebba, Kwara State; the Nigerian Newsprint Manufacturing Company Limited, Oku-Iboku, Akwa Ibom State; and the Nigerian National Paper Manufacturing Company Limited in Ogun State.
The mills are no longer operational, and the country has had to depend on importation to make up for the shortfall.
The Asset Management Company of Nigeria has taken over the management of NNMC over unpaid debts.

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Aviation Union Threatens Strike Over Revenue Deduction

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The Air Transport Services Senior Staff Association of Nigeria (ATSSSAN) has said it would embark on industrial action if the Federal Government refuses to exempt aviation agencies from a directive that seeks to deduct 50 per cent from their Internally Generated Revenue (IGR).
ATSSSAN disclosed this in a communique issued by its National Executive Council (NEC) after its National Economic Council meeting in Ibadan, Oyo State.
The NEC, which had in attendance all 17 affiliates of ATSSSAN comprising all branch Chairmen, Secretaries, and national officers, reiterated calls for the exemption of the aviation agencies from the deduction of 50 per cent  of their IGR under the Fiscal Responsibility Act.
The association said the agencies were not established for profit, hence stifling them of the required funds would jeopardise the effective performance of their safety and security mandates.
ATSSSAN warned that if the Federal Government insist on the deduction, it would compound the current financial state of the agencies, and “we may be forced to direct all aviation workers to down tools until the government reverses itself”.
Last year, the Federal Government directed the Office of the Accountant General of the Federation to immediately commence the presidential directives on a 50 per cent automatic deduction from the IGR of Federal Government-owned enterprises.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, had issued a circular titled, “Re: Implementation of the Presidential Directives on 50 per cent Automatic Deduction from Internally Generated Revenue of Federal Government Owned Enterprises (FGOEs)”.
According to the circular, all partially-funded Federal Government agencies and parastatals (receiving capital or overhead allocation from the Federal Government’s budget) should remit 50 per cent of their gross IGR, while all statutory revenues, like tender fees, contractor’s registration, and sales of government assets, among others, should be remitted 100 per cent to the sub-recurrent account.
ATSSSAN stated its apprehension over what it perceives as deliberate efforts by certain private airlines to stop their employees from forming labour unions.
Citing Section 40 of the Nigerian Constitution and international labor norms, the association contends that such actions constitute a violation of workers rights.
The statement, however, did not specify the airline operators suppressing workers from joining unions.
Part of the statement read, “The NEC-in-session calls on all employers in the private sector in the aviation industry to respect collective bargaining agreements in order to avert industrial crises at the workplace.
“NEC-in-session was seriously disturbed by the continuous willful acts by some private airlines towards frustrating the unionization of their employees, contrary to the letters and spirit of Section 40 of the Constitution of the Federal Republic of Nigeria and relevant international conventions and laws”.
The association, therefore, called upon the Federal Ministry of Labour and Employment to uphold and enforce employees’ rights to unionise within the aviation industry.
It urged the Minister of Aviation and Aerospace Development, Festus Keyamo, to orchestrate a dialogue involving all relevant stakeholders, including the non-compliant airlines and labour unions, under the auspices of the Labor Ministry.
At the meeting, other issues affecting workers, especially members’ welfare and working conditions, and the aviation industry at large were discussed, and positions and resolutions were taken.
The aviation group decried what it perceive as a dearth of avenues for career progression within government-owned aviation entities.

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NCDMB Rakes In $1m Return On NEDOGAS Investment

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Management of the Nigerian Content Development and Monitoring Board (NCDMB) says it has received a cheque of $1 million from Nedogas Development Company Limited (NDCL).
A statement made available to newsmen by the Directorate of Corporate Communications and Zonal Coordination of the Board said the sum received was part of the return on investment (ROI) on one of its strategic investments.
The statement added that: “The cheque was presented by the Chairman of the company, Engr. Emeka Ene, when he visited the Nigerian Content Tower in Yenagoa, Bayelsa State, where he was received by the NCDMB’s Executive Secretary, Engr. Felix Omatsola Ogbe, and other members of the Board’s management.
“Nedogas Development Company Limited (NDCL) is a joint venture company between Xenergi Limited and NCDMB Capacity Development Intervention Company.
“As part of the project, Nedogas NDCL constructed and commissioned a 300 MMscfd Capacity Kwale Gas Gathering (KGG) and injection facility located in the Umusam Community, near Kwale in Delta State, Niger Delta, Nigeria.
“The KGG Facility was designed to handle stranded gas resources in Nigeria’s OML56 oil province by providing the opportunity for independent operators in the area to monetize natural gas from their fields through the gas gathering, compression, injection and metering infrastructure of the KGG for quick market access.
“Nedogas is one of the several strategic and successful investments of the NCDMB funded from the Nigerian Content Development Fund (NCDF), in line with the Board’s mandate to build capacity and catalyze local projects in the Nigerian oil and gas industry as enshrined under the Nigeran Oil and Gas Industry Content Development (NOGICD) Act”.
In his remarks, according to the statement, the NCDMB Executive Secretary stated that the success story of NEDOGAS at Kwale, Delta State, could be replicated in other oil and gas producing communities to minimise gas flaring, saying that Ogbe also declared the Board’s readiness to continue collaborating with the company.
“Their model should be extended to other parts of the country where gas flaring is continuing.They have shown that with the modular system, we can quickly remove flaring from our operations in Nigeria.
“The NCDMB had continued to receive briefings from its investment partners. We’re still waiting for them to come back with success stories. Some of them are near completion and have not started operations yet”, the NCDMB’s Executive Secretary said.
In his remarks, Chairman of NEDOGAS, Mr. Emeka Ene, conveyed the company’s excitement in returning part of the credit and profit, adding that it was a proof that the NCDMB’s investment was a success and they are getting back that investment, adding that the firm looks forward to further collaboration with the NCDMB to expand its scope.
Responding, the NCDMB boss said the Board was now doing effectively and practically and tangibly what it was set up for, saying its mandate was to impact the economy by direct interventions.
“That’s the way the economy can grow, improve the gas infrastructure in such a way that’s sustainable despite the tight economic conditions”, he said.
He added that, “the  value propositions of the Nedogas project include total eradication of flared gas and conversation of environmental pollutants into products of value and creation of a strategic gas gathering hub and injection node for quick access to market for gas owners to monetize gas”.
Other benefits, according to Ogbe, include the provision of alternative gas supply to western flank of the OB3 line to add to the volumes of economic sustainability and increase in Nigeria’s Gross Domestic Product (GDP).
“The partnership with NEDOGAS is one of NCDMB’s 15 strategic investments geared towards actualizing the Federal Government’s aspirations in key areas of the oil and gas industry.
“Most of the projects were targeted at actualizing the Federal Government’s Decade of Gas programme.
“Some of NCDMB’s notable third-party investments include Waltermith’s 5000 barrels per day (bpd) modular refinery in Imo State, Azikel Group12,000 bpd hydro-skimming modular refinery in Gbarain, Bayelsa State, and Duport Midstream’s 2,500bpd modular refinery in Edo State.
“Other investments of the Board include Better Gas Energy for LPG terminal and gas distribution, partnership with Rungas Prime Industries Limited to establish a cooking gas cylinders manufacturing plant in Polaku, Bayelsa State, and Alaro City in Lagos and the partnership with Butane Energy to deepen LPG utilization in the North”, he stated.
The Executive Secretary also noted that there was the partnership with BUNORR Integrated Energy Limited in Port Harcourt, Rivers State, to produce 48,000 litres of base oil per day and partnership with the Nigerian National Petroleum Corporation (NNPC) Limited, Brass Fertilizer and Petrochemical Company Limited, and DSV Engineering to establish a 10,000 Ton Methanol Production Plant, Odioama, in the Brass Local Government Area of Bayelsa State.

By: Ariwera Ibibo-Howells, Yenagoa

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