The Senate has reiterated its concerns about the prolonged dormancy of Ajaokuta Steel Company Limited (ASCOL) in Kogi State, Nigeria, which has remained non-operational for nearly four decades since its inception.

During a one-day investigative hearing, focused on allegations of corruption and inefficiency at ASCOL and the National Iron Ore Mining Company (NAICOM), as well as the performance of federal government-owned enterprises since 2002, the Senate Ad-hoc Committee unearthed several troubling issues.

The committee, led by Senator Adeniyi Ayodele Adegbonmire (SAN), was disappointed by the presentation from the Minister of Steel Development, represented by Permanent Secretary Dr. Chris Osaruwanmwen, which was deemed “insufficient.” Senator Adegbonmire questioned the adequacy of the ministry’s oversight, highlighting the sparse two-page memorandum provided. He stated, “What you provided lacks the substance needed to address Ajaokuta’s challenges. Explain the issues and the steps taken to resolve them; your presentation indicates a lack of oversight.”

The committee also revealed that the privatization and concession agreements involving the company were not in Nigeria’s best interest. Specifically, Global Infrastructure Nigeria Limited (GINL), which was supposed to inject capital into ASCOL under the concession agreement, had failed to do so. Furthermore, Nigeria controversially paid GINL $496 million in an out-of-court settlement, despite GINL’s minimal investment, a revelation that sparked outrage among Senate members over apparent financial mismanagement.

Hamisu Abdullahi, Director of Banking Services at the Central Bank of Nigeria (CBN), confirmed the payment, detailing that $250 million came from the Federal Government’s independent revenue account in September 2022, with the rest disbursed in installments.

Engr. Sumaila Abdul Akaba, the Sole Administrator of Ajaokuta, asserted that ASCOL remains a crucial asset and that the plant is in good condition. He mentioned that a completed line plant could fulfill the lime needs of all 36 states within six months.

Akaba refuted claims that ASCOL’s technology is outdated, noting that the same Russian technology used in Ajaokuta is also employed in steel plants in India and China. He defended the need for retaining staff at ASCOL and the allocation of N4.2 billion for salaries in the 2024 budget, which had been criticized by Senator Natasha Akpoti-Uduaghan. Akaba stressed that maintenance staff are essential for preserving the company’s operational potential, comparing it to the neglect of a new car left unattended for a year.

The hearing included various stakeholders, such as representatives from the Federal Ministry of Finance, the Nigeria Society of Engineers, and the Steel and Engineering Workers Union of Nigeria.