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Ajaokuta steel power debt to be investigated

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By Usman Oladimeji

₦33bn debt was accumulated by the non-operational steel company.

Following a recent meeting with President Bola Tinubu at the Aso Rock Villa, Abuja, the Minister of Steel Development, Shuaibu Audu, informed State House correspondents that the Federal Government plans to probe into the matter of the ₦33bn Electricity debt accumulated by the non-operational Ajaokuta Steel Company Limited. This debt of ₦33bn owed to The Nigerian Bulk Electricity Trading (NBET) Plc. has prompted the Transmission Company of Nigeria’s decision to disconnect the company from the national grid.

The outstanding debt of ₦33bn owed to Nigerian Bulk Electricity Trading can be broken down into two parts including ₦30.85bn allocated for energy and capacity, and ₦2.22bn owed to service providers. Audu was taken aback by the company’s mounting debt despite its underutilization. As efforts are directed towards reviving the Ajaokuta steel company, the capacity to settle these outstanding amounts – mostly comprising interest payments – may be limited, thus posing a challenge for immediate payment.

Reviving Ajaokuta steel functionality is challenging.

Audu further mentioned that the federal government will ensure that their agency, NBET, does not impede the endeavors to revitalize the steel corporation, which has remained non-functional for approximately 45 years. In the endeavors to reinvigorate Ajaokuta, he emphasized the dire need for our government ministry and agency to be unimpeded. It is disheartening to encounter obstacles originating from another faction within the government, which only serve to exacerbate our already challenging situation, he said.

He said their forthcoming agenda is to promptly convene a meeting and devise a strategy within the upcoming days. This plan aims to restore their connection to the power grid and restore order to the situation. Reviving Ajaokuta is a long-term endeavor that cannot be achieved in a short span. This industrial establishment has been dormant for 45 years, making the task of restoring its functionality a challenging one. He emphasized the imperative to secure the cooperation of all branches of government, the involvement of stakeholders, and the backing of every individual in order to successfully carry out this arduous task.

Receiving support from individual, the power company is vital.

According to his statement, the successful execution of this project cannot be accomplished solely by the President or himself. He emphasized the importance of receiving support from every individual involved, including the electricity company, in order to revitalize the steel company. The Tinubu administration has previously revealed that it’s embarking on a three-year plan to resuscitate the moribund complex as part of the President’s agenda to diversify the economy, create jobs and attract foreign direct Investment.

Moreover, the minister made an announcement about Tinubu’s approval for the formation of a committee tasked with finding a suitable location to set up a fresh steel facility in the nation. He mentioned that Tinubu had entered into a deal to establish a $5bn plant with Jindal Steel of India during the G20 summit held in India last year September. Audu gave a detailed account of how he provided information to President Tinubu and engaged in discussions with Jindal Steel’s delegates, who displayed immense dedication towards their agreement.

Related Article: FG sets to revive Ajaokuta as Free Trade Zone

In the quest for an ideal location, he expressed the ongoing exploration for land proximity to both a port and a gas station, and rich in natural resources like iron ore and similar minerals. The approach includes considering options of establishing a brand-new facility from scratch or obtaining an already existing plant, like the renowned Delta steel plant. He went on to say that Tinubu has granted permission to establish a committee composed of highly influential figures within the government, such as the Finance minister and the CME, along with various other crucial stakeholders.


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