In 1980, President Shehu Shagari laid the foundation stone for what will become a $4.6bn project. However, the Ajaokuta project is, in fact, older than independent Nigeria itself. Let’s rewind to 1958. The government of Sir James Wilson Robertson, the last British Governor-General of Nigeria, conducted a feasibility study on the possibility of setting up a steel company in the country. Many reports passed, and a civil war happened, and still, the Nigerian government hadn’t decided the perfect place to build the steel plant.
It is believe that the location of a steel plant was largely determined by the politics of the day. While some people wanted it in the North, others in the East, and some others in the West. So this place eventually became the perfect place politically.” It was also the perfect location geographically. In 1972, one year after the Nigerian Steel Development Authority was formed; iron ore was discovered in Itakpe, Kogi State.
A Soviet survey team discovered the deposits and in 1975, a contract was signed between the Nigerian government and the Soviet state-owned company, Tiajpromexport (TPE). So the Ajaokuta project started before the collapse of the Soviet Union on December 25, 1991.
Everyone at the time was so excited about the potential of this project. One of the large industrial scale equipment at Ajaokuta Steel Company bears the inscription ‘Made in USSR’.
The Nigerian government sent many Nigerian engineers to Russia and the Soviet states to train them and prepare them for Ajaokuta. In 1979, Shagari’s government began work on Ajaokuta Steel Project. it was a massive project. The entire Ajaokuta Steel Project is even alleged to be bigger than Lokoja. There are 24 housing estates on the project. Some of the estates have over 1000 homes. There’s an -ND awarding institution there, Hospitals. There’s even a seaport. Then there’s the main Steel Plant itself. Ajaokuta Steel Plant is 12,000 plots large. It has a 68-kilometre road network and another 24-kilometre road network underground. The coke oven and byproducts plant are larger than all the refineries in Nigeria combined. It is Nigeria’s biggest mineral resource investment in one place.
It was built it to make it almost independent of imports. To supply the Ajaokuta Steel Mill with raw materials and connect it with the world market, a contract was awarded in 1987 for the construction of Nigeria’s first standard gauge railway, from the iron mines at Itakpe to the steel mill at Ajaokuta and continuing to the Atlantic Ocean at Warri.
Ajaokuta Steel Company is one of the products of the Nigerian-Russia relationship. The Steel Plant has 43 plants in it. From Assembly plants to workshops, almost everything needed to function can be built there. Thousands of Russian engineers lived and worked in Nigeria to make this project come to life and in 1983, Shehu Shagari inaugurated the project.
Corruption started to happen, and Ajaokuta became a conduit pipe. It became an outlet where money meant for this place never really reached here.
Ajaokuta is estimate to have cost $4.6 billion. That would equate to about $14.5 billion today when you add yearly inflation rates. Before we look into the amount it cost to build it, we have to first look at Ajaokuta’s biggest problem. Many analysts believe that Ajaokuta’s biggest problem is the lack of political will. That when you look at how far the project has come, and what little is left, it doesn’t matter anymore how much it will cost to complete. This project is currently at 98% completion.
Ajaokuta Steel Complex has gulped billions of dollars since 1979. One question often asked is, if the project has made it this far, isn’t it possible to just start up with the ones that are available and then complete the rest as you go? This is actually happening, to a certain degree. The power plant in Ajaokuta was said to be generating 110MW and transferring to the National Grid until gas pipeline vandalisation halted it. A few other plants also get small-scale projects done, but very little, compared to what it was built to do.
At the core of the Ajaokuta Project is a blast furnace, the type of furnace used for 70% of the world’s steel production but it has never been turned on. According to technicians the only time you can turn on a blast furnace has to be when you are ready to begin production. That for production to begin, all infrastructures has to be in place, including a functioning seaport and a rail system. You can’t turn it off again for another 10 years at least. So the blast furnace at Ajaokuta Steel Company has never been switched on.
One end of the Ajaokuta plant is at the banks of River Niger, and in fact, the Yar’adua administration did some dredging work there. Also important is a rail network that will transport the steel out of the plant. It is believed that road transport is not an option for this scale of production because the roads will crumble.
After several failed attempts at privatisation, the Nigerian government took back control in 2016. The Itakpe–Warri Railway fell into disrepair, and part of the track was vandalised. In 2016, the Nigerian government awarded contracts to the China Civil Engineering Construction Corporation and Julius Berger to repair and complete the railway. Test runs began in November 2018.
For now some experts are speculating that it will cost in excess of 1 billion dollars to get it working again, and 18 months of active work, but that the problem is not even the amount. It’s the political will.”
“If the blast furnace is ready today, 10,000 technical staff will be needed on ground to get working” said Engineer Akin. And that’s just the first phase. In the steel industry, one technical job created automatically creates 50 more jobs. What this means that a total of 500,000 jobs can be created. “There’s a place for just about any course of study here,” Mr Badams said. “No matter what you studied, there’ll most likely be a place for you here.”
And all of this, still, is at the foundational level.