In a noteworthy development, the National Assembly has augmented the proposed 2024 budget for the dormant Ajaokuta Steel Company, elevating the allocation from N4.45 billion to N5.18 billion. This increase of N730 million is aimed at rejuvenating the inactive steel plant, which has remained dormant for over four decades.
A significant portion of the budget, approximately 83%, is allocated to personnel costs, amounting to N4.3 billion. Within this, salaries alone consume N2.62 billion. The remaining funds, after deducting personnel costs, are designated for the maintenance of power, water, and equipment.
In addition to the core expenditures, seven new capital projects have been introduced in the approved budget. Notably, these initiatives extend beyond Kogi state and are unrelated to the steel plant itself.
The new projects encompass diverse areas, including the supply of farm feed and farming materials for Lagos communities (Obalende, Okofaji, Olowogbowo, and Isale Eko) at a cost of N99.19 million. Entrepreneurial development training and empowerment for women and youth across Kwara North senatorial district will receive N30 million, while the provision of solar streetlights in rural communities in Niger east senatorial district is allocated N200 million.
Further allocations include N100 million for solar streetlights in Kwara south, N100 million for road rehabilitation and solar streetlights in Lagos communities, and N100 million for solar streetlights in Shiroro, Gurara, and Bosso LGAs in Niger east senatorial district.
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It’s noteworthy that Nairametrics observed a significant allocation, N400 million (55% of the new addition), earmarked solely for solar streetlights in the Niger East senatorial district.
In addition to the company’s budget, the Ministry of Steel Development has separate allocations, including N4 billion for the concession of the steel plant, N200 million for the revival of Ajaokuta Steel Company Limited (ASCL) and National Iron Ore Mining Company (NIOMCO), and N800 million for transaction advisor services related to the Ajaokuta project.
Despite consistent budgeting, Ajaokuta Steel Company has faced operational challenges for over 40 years, primarily due to unsuccessful privatization and concession attempts. The government remains steadfast in its commitment to revitalize the plant, seeking partnerships and funding. Notably, a collaboration with Chinese company Luan Steel Holding Group is on the horizon, aiming to leverage the Ajaokuta Steel Plant for military hardware production. The government also aims to generate N35 billion from the local financial market to address challenges, including a substantial N33 billion electricity debt leading to disconnection by the Transmission Company of Nigeria (TCN).
