The 2022 budget details report obtained from the Budget Office revealed that the Federal Government allocated the sum of N4.2bn to the Ajaokuta Steel Company Limited for the year 2022.
According to the 2022 Budget details report, the sum of N3.9bn was allocated to cover personnel cost, N186.9m was allocated for capital projects implementation while N75.3m will be expended on overhead.
The report said under personnel cost, the Federal Government allocated N3bn to salaries and wages while N924.6m was allocated to allowance and social contributions. The report revealed that the government planned to develop new projects on the inactive company.
In the 2022 budget, the sum of N97.2m was allocated for the provision of water facilities, N59.3m for the maintenance of power facilities and N30.5m for lighting safety and security.
The company which was formed into a legal corporation in 1979 reached 98% completion in 1994, with 40 of its 43 plants built before it got stuck and the remaining 2% for external infrastructure like waterways and viable ports.
The government had made attempts at privatizing the company but failed. Similarly, an attempt to restore the company, an Indian company, Global Steel Holdings Limited, won the concession of the Ajaokuta steel mill for a 10-year period but the agreement was revoked when the Federal Government accused the firm of asset stripping, a development which led to a legal dispute between both parties.
In 2016, the Federal Government announced that the legal dispute had been resolved, after it allegedly surrendered the National Iron Ore Mining Company, Itakpe, to Global Steel for the remaining concession period, in line with an agreement reached during mediation talks. The resolution has since turned quarrelsome.
In 2019, President Muhammadu Buhari ordered for the company to be completed and the Senate also passed a resolution urging the Federal Government to complete the Ajaokuta Steel Complex last year.
The Federal Government inaugurated the Ajaokuta Presidential Project Implementation Team. According to the Minister of Mines and Steel Development, Olamilekan Adegbite, the Ajaokuta Presidential Project Implementation Team would enact an agreement reached between Buhari and Russian president, Vladimir Putin, which required Russia to assist in completing the project and finding a Russian firm to manage it on Build-Operate-and-Transfer basis.
The minister also explained that Afreximbank would offer $1bn to fund the project while the Russians would offer $460m, adding that a Russian firm, MetProm Group, would ensure the completion and operation of the steel company.
The idle steel company had continued to receive regular budgetary allocations and disbursements from the federal government in the past six years.