The federal government is set to spend $1.45billion (about N522 billion) to revive the ailing Ajaokuta Steel Company and the National Iron Ore Mining Company (NIOMCO) according to the Minister of Mines and Steel Development, Olamilekan Adegbite. Adegbite, who made the disclosure during a media briefing in Abuja recently, said the fund would be sourced from the Russian Export Centre and Nigeria’s Export-Import Bank (Neximbank).
According to him, “The funding is coming from two sources, the Russian Export Centre, which is a Russian sort of Neximbank. They are providing $450m for the project and of course Nigeria’s Neximbank will be providing $1bn.
He said, “So, we have a total of $1.45bn. But the whole essence is that the Russian technical experts will come, do the audit which will lead to them giving us an exact figure of how much it will cost to resuscitate Ajaokuta and NIOMCO.”
Adegbite further clarified that, “President Muhammadu Buhari has said that the Nigerian government will not spend any money on Ajaokuta again, so Ajaokuta is making a business case which has been accepted and once it is resuscitated and producing, it can pay back its loan. “So, the whole essence is that they will build and operate it for a while upon agreed terms and at the end of the term when the loan is paid with interest, the plant will be reverted back to Nigeria and at that time a decision will be taken on who will manage it.
“I must say at this point that we are working on what we call local context. Right now, we proposed 60 per cent local content. Everything that is required in Ajaokuta and NIOMCO that is obtainable in Nigeria must be sourced from Nigeria. Only those things that we cannot provide can be brought from outside so right now we are at that stage of 60 per cent local content and 40 per cent foreign,” Adegbite assured.