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STEEL TECHNOLOGY – AS A ROADMAP

FOR ACTUALIZATION OF THE 7-POINT


AGENDA

A PAPER PRESENTD AT THE NIGERIAN


ASSOCIATION OF TECHNOLOGISTS IN
ENGINEERING (NATE) CONFERENCE HELD AT
ABUJA
15TH – 16TH October, 2009

BY
NATE (AJAOKUTA STEEL COMPANY BRANCH)
Introduction

On his inaugural day, May 29, 2007, President Umaru Musa Yar Adua said, “Our
goal now is to build the greatest accomplishments of the past few years. Relying on
the 7-point agenda that formed the basis of our compact with the voters during the
recent campaigns, we will concentrate on rebuilding our physical infrastructure and
human capital in order to take our country forward. We will focus on accelerating
economic and other reforms in a way that makes a concrete and visible difference
to ordinary people.”

To the generality of Nigerians, that was the official birth date of the now popular
7-point agenda. The key phrases of “rebuilding our physical infrastructure and
human capital”, “take our country forward” and “accelerating economic and other
reforms” were the skeleton of the agenda. On these the flesh grew: Power and
Energy, Food Security, Wealth Creation, Transport Sector, Land Reforms,
Security, and Education.

August 1, 2007, the presidency released a brief explanation of what the 7-point
agenda entails:

POWER AND ENERGY – The infrastructural reforms in this critical sector


through the development of sufficient and adequate power supply will be to ensure
Nigeria’s ability to develop as a modern economy and an industrial nation by the
year 2015.
FOOD SECURITY – This reform is primarily agrarian based. The emphasis on
the development of modern technology, research, financial injection into research,
production and development of agricultural inputs will revolutionalize the
agricultural sector leading to a 5 – 10 fold increase in yield and production. This
will result in massive domestic and commercial outputs and technological
knowledge transfer to farmers.
WEALTH CREATION – By virtue of its reliance on revenue from non-renewal
oil, Nigeria has yet to develop industrially. This reform is focused on wealth
creation through diversified production especially in the agricultural and solid
mineral sector. This requires Nigerians to choose to work, as hard work by all is
required to achieve this reform.
TRANSPORT SECTOR – The transportation sector in Nigeria with its poor
roads networks is an inefficient means of mass transit of people and goods. With a
goal of a modernized industrialized Nigeria, it is mandatory that Nigeria develops
its transportation sector. The PDP government has already started this process by

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the ongoing rehabilitation and modernization of the railway. While the reforms
might take some time to take effect, it is a need that must be addressed.
LAND REFORMS – While hundreds of billions of dollars have been lost through
unused government-owned landed asset, changes in the land laws and the
emergence of land reforms will optimize Nigeria’s growth through the release of
lands for commercialized farming and other large scale business by the private
sector. The final result will ensure improvements and boosts in production and
wealth creation initiatives.
SECURITY – An unfriendly security climate precludes both external and internal
investment into the nation. Thus, security will be seen as not only a constitutional
requirement but also as a necessary infrastructure for the development of a modern
Nigerian economy. With its particular needs, the Niger Delta security issue will be
the primary focus, marshaled not with physical policing or military security, but
through honest and accurate dialogue between the people and the Federal
Government.
EDUCATION – The two-fold reforms in the educational sector will ensure firstly
the minimum acceptable international standards of education for all. With that
achieved, a strategic educational development plan will ensure excellence in both
the tutoring and learning of skills in science and technology by students who will
be seen as the future innovators and industrialists of Nigeria. This reform will be
achieved through massive injection into the Education sector.

That was August 2007. As time went by and the thinking deepened, both the
definition and the contents therein become wider and deeper. At a certain point
there was more mention of Vision 20-2020 than the 7-point agenda. The vision 20-
2020 in this context is merely “an image or concept in the imagination” of the
nation, thus, where we want to be or what we want to be by the year 20-2020. In
this case we want to be among the twenty (20) most developed economies of the
world by the year 2020. So, where does the 7-point agenda fit in?
After carefully assessing the 7-point agenda and vision 20-2020, the government
came out clearly to show that vision 20-2020 is the target, while the agenda is
where the decisions and actions for the vision lies. Therefore, we will be safe to
say that, the success of vision 20-2020 mainly depends on the success of the
agenda. This is because the current top economies of the world, one of which we
hope to displace, succeeded in the ingredients of the agenda before being at the
top.

Now, how does technology become the vehicle to reach the desired height?
It is not by coincidence that, the top 20 economies of the world are also the most
technologically developed nations. It could clearly be seen that technology was
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used as a vehicle to get them where they are today. So, how is Nigeria prepared to
go all the way in terms of technology to achieve the 7-point agenda and
consequently the Vision 20-20-20?

Technology

The word Technology has been described as “general term for the processes by
which human beings fashion tools and machines to increase their control and
understanding of the materials environment.” It does not matter as in any case,
whether these tools are for tilling the land, or for aiding the teacher to produce the
desired results in his students.

Historians of science asserted that, technology is an essential condition of


advanced, industrial civilization, and that the rate of technology change in any
nation develops its own momentum once set in motion. This is without any
limitation to geographical locations or political systems, as it did well under
capitalist USA and Europe, Communist Russia, Socialist China, and even loose
democracies of the Asian tigers.

Nigeria is a country, deliberately endowed with both human and material


resources. The 7-point agenda of the Federal Government is meant to take control
of these resources and address basic developmental needs to fast track the nation
towards achieving Vision 20-20-20. But difficult to accept as it may for those who
don’t understand the powers of steel, the chairman, House Committee on Steel,
Hon. Aminu Shehu Shagari, did not mince words when he told the nation that:
“Vision 20-2020 doomed without Ajaokuta Steel Company Limited” (Vanguard
Newspaper, August 24, 2009). If vision 20-2020 is doomed, it is because its
primary ingredients, the 7-point agenda, are doomed without indigenous steel.

Now Let us take a look at the steel industry and see why the 7-point agenda must
go “the steel way”. The developed nations are the industrialized nations,
industrialization is driven by technology, and technology is driven by steel.

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Ranking of Countries by GDP and Steel Production as at 2008

GDP (millions Steel Production


RANK COUNTRY of USD) Million tons / year
— World 54,584,918 1,343
— European Union 16,905,620 210
1 United States 13,807,550 97
2 Japan 4,381,576 120
3 Germany 3,320,913 49
4 China (PRC) 3,280,224 489
5 United Kingdom 2,804,437 16
6 France 2,593,779 19
7 Italy 2,104,666 32
8 Spain 1,439,983 19
9 Canada 1,436,086 16
10 Brazil 1,313,590 34
11 Russia 1,289,535 72
12 India 1,100,695 53
13 Mexico 1,022,816 17
14 South Korea 969,871 51
15 Australia 908,990 8
16 Netherlands 777,241 7
17 Turkey 659,276 26
18 Sweden 454,839 6
19 Belgium 453,283 11
20 Indonesia 432,944 4
41 Nigeria 166,985 0.30

RATIONALE FOR STEEL DEVELOPMENT IN NIGERIA

A common question often raised by the developed nations is on the rationale for
setting up mushroom steel plants in the developing nations when there is a world
wide surplus capacity for steel production. It is often argued that, in view of the
relatively low standard of living, often below subsistence level in these countries,
the limited resources of capital, skilled manpower and overseas aid should be
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utilized for more urgent purposes such as improving food production, education,
transport and hospital care. Furthermore, steel production on small scale is very
expensive and even the developed countries are finding it increasingly difficult to
sustain production except in large-scale units, well beyond the capacity of most
developing countries. The general opinion in many developing countries however
is that, for strategic and economic reasons, they cannot continue to depend on
foreign sources for such a primary material as steel, especially when the basic raw
materials and manpower resources are available. Furthermore, the development of
the steel industry has the potential for proliferation of a wide range of upstream
and downstream industries, promoting technology transfer, and creating jobs. In
fact it is estimated that for every job created in a steel plant, there are about twenty
new jobs upstream and downstream. These were some of the arguments adduced
by Nigeria to support the decision to embark on the development of the steel
industry.

Steel as the Material Backbone of Economic Development

Steel is the material backbone of economic development because of its


passive use in all spheres of economic life, either as direct material or as
operating tools. For example the creation of high productive capacity in
mechanized farming and the processing preservation and storage of food
products require implements, tools, machines or materials that have
substantial steel input. The development of economic and social
infrastructure (modern buildings, roads, railways, harbours, power
generation, telecommunication facilities, etc.) requires direct use of steel or
equipment made of steel. Industrial products either in the form of consumer
goods or capital products are either made of steel and / or are made of plant
and equipment with substantial steel inputs. Even the provision of a wide
range of services requires direct or indirect use of steel.

The pervasiveness of the direct or indirect use of steel in modern economic


life has led to direct correlation of national steel consumption to national
economic development. The apparent steel consumption per capita is
normally regarded as a fairly accurate indicator of economic development.

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Steel Production as the Hub of Industrialization

Steel production occupies a central place in the process of industrialization.


According to Chukukere 1986, steel has enabled Britain to launch the first
industrial revolution and Western Europe to colonize most of the world.
Germany overran Europe, and Japan suddenly leapt to the forefront of
modern technology. Similarly, the United States of America and the Soviet
Union (in its days) became the supreme post-war global powers as the latter
systematically boosted its steel capacity that exceed the entire output of
continental Europe.

Apart from its supply of vital industrial materials to the other industrial
systems, the steel industry is all-embracing. There is virtually no type of
industry or production techniques you cannot find in an integrated iron and
steel plant. Steel production capacity provides a veritable base for scientific
and technological research for industrial application and for developing
skills in operating, maintaining and managing almost all types of industrial
establishments.

The Industry as an Economic Trigger

The existence of a viable steel plant must, of necessity, give rise to


numerous ancillary industries upstream and downstream to feed and to be
fed by the steel plant. There will also be the need for the development of
social and economic infrastructure in otherwise rural communities, and the
provision of numerous services such as distributive trade, transport, medical
services, consultancy, banking and finance, education, etc. In addition,
scientific research and technological development will have to be undertaken
in a continuous manner to solve local specific problems.

All these activities involve productive employment of a large labour force.


Statistical evidence indicates that the steel industry is the biggest generator
of employment. Were the Ajaokuta Steel Plant to become operational at the
1.35 million tones per year stage, for example, up to 10,000 people would
have been provided with direct employment at the Steel Plant and another
200,000 would have been in employment in the upstream and downstream
ancillary industries to the Steel Plant. There would also have been the
multiplier effect of the employment created on the other sectors of the
economy which would have increased in geometric progression. Let us
compare Nigeria to Indonesia on some key economic indicators:
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Nigeria/Indonesia Comparison Table on Key Economic Indicators

Key Economic
Indicators INDONESIA NIGERIA Sources
(Billions of U.S. dollars unless otherwise indicated)

1 Nominal GDP 432.944 166.99 UN


Real GDP Growth 3
2 (percent) N/A
GDP by Sector:
1 Agriculture 27 30 EarthTrends
2 Manufacturing 40.2 45* EarthTrends
3 Services 61.1 25 EarthTrends
4 Government 7.7 N/A
5 Per Capita GDP (US$) 742 283 EarthTrends
6 Labor Force (millions) 98.2 N/A
Unemployment Rate 6.4 14**
7 (pct) CBN
Sources: Government of Indonesia *Mostly oil sector
**Youth Unemployment
is over 20%

TARGETS NIGERIA HAS TO MEET IN ORDER TO JOIN THEM

If we use Indonesia as our beacon, it means we must achieve the following


targets at least half way to the year 2020:

? GDP must be well above USD400 billion


? Industrial sector outside oil, must substantially develop
? Unemployment rate must be less than 7%
? Per Capita GDP must be above USD700

At the heart of these targets, is the industrial sector.

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Steel as an Index of Power

It would not have been possible to build military process without steel which
has to be used in building warships, warplanes, armoured vehicles, guns,
scud and patriot missiles, etc. There would also have been no reasonable
success in the development of chemical, biological and nuclear weapons of
mass destruction without steel. The building of a powerful, effective and
highly dependable military system must be based on the development of an
indigenous military industrial complex that will produce the necessary
armaments and other military hardware using locally produced steel.
According to Paul Unongo, the then Minister of Power & Steel, no country
can talk of power status and interests in any form without a well-established,
integrated, fully operational native steel industry.

All countries that can be reckoned with in terms of military capability have
well protected special steel plant units, within their steel plants, called
“Defense Cell”, exclusively for research in steel needs of the military.

In the case of Nigeria, all of the above would have been achieved through
Ajaokuta Steel Plant had the company been completed and in full operation.
The company which is the largest Federal Government Investment in one
location, close to 30 years since its inception, is still 98% completed. It had
been so for the past 20 years.

SCOPE OF PROJECT

The Federal Government of Nigeria in its national planning efforts realized


quite early the important role of the steel industry in economic development.
Active planning for the development of the Nigerian Steel industry started
from the beginning of the second National Development Plan (1970 – 1974).
The objectives that were to be achieved for embarking on the iron and steel
projects as articulated in the Plan document include:

(a) The provision of a sound industrial base for the stimulation and growth of
industries which contribute both directly and materially to economic
growth;
(b) Full exploitation of local raw materials such as iron ore, limestone,
dolomite, coal, etc. thereby providing for additional employment and
regional development;

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(c) The acquisition of technology by Nigerians to enhance rapid industrial
development of the country;
(d) Savings in foreign exchange which can be channeled to other areas of
investment by reducing importation of iron and steel; and
(e) Provision of mass employment to the people.

How have these laudable objectives been achieved in over two-and-a-half


decades of steel development efforts? The truth is that not much success has
been recorded in the attainment of any of the objectives. Just like in many
aspects of our national development plan, the steel development efforts have
been bedeviled by poor plan implementation, which are largely due to the
instability in the Nigerian political influence in decision making on matters
that strictly call for prudence and economic rationality, and short-sighted
pursuit of narrow self-interest on the part of many Nigerians.

CHARACTERISTICS OF AJAOKUTA STEEL PLANT

The Ajaokuta Steel Plant incorporates 17 major units according to design. The
units are built on an 800 hectares sprawling green field, on three platforms
dovetailing in to the bank of the River Niger. Annual capacities and state of
readiness of each unit are presented below.

S/ UNIT/PLANT MAIN PRODCUT/ ANNUAL STATUS OF EACH


N CAPACITY UNIT/PLANT
1 Sinter Plant 2,610,000 tonnes of Sinter 100%
2 Coke Oven & By- 880,000 tonnes of Coke 89.91% completed
Product Plant 12,000 tonnes Fertilizer
48,000 tonnes Tar
350,000 tonnes Steam
210,240,000 m3 CO gas
3 Iron Making Plant 1.35million tonnes of liquid 99% completed
(Blast furnace) metal
155,000 tons Pig casting
675,000 tons BF Slag
4 Steel Making Plant 1.3 million tons of liquid steel 99% completed
5 Billet Mill 795,000 tonnes of billets 100% completed
6 Light Section Mill 400,000 tonnes of rods and 100% completed
light sections
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S/ UNIT/PLANT MAIN PRODCUT/ ANNUAL STATUS OF EACH
N CAPACITY UNIT/PLANT
7 Wire Rod Mill 130,000 tonnes of wire coils 100% completed
8 Medium Section & 560,000 tonnes of structural 100% completed
Structural Mill steel
9 Thermal Power plant 110 MW of electrical energy 100% completed
10 Forge & Fabrication 4,200 tonnes of forging 100%completed each
Shop 4,600tonnes of fabricated
structures
11 Machine & Tools 19,000 tonnes of machined 100% completed
Shop products
12 Foundry Shop 7,000 tonnes of Ferrous & non- 100% completed
ferrous casting
13 Power Equipment Repair of electrical Motors, 100% completed
Repair Shop Transformers etc
14 Rubberising Shop Repair of Conveyor Belts, 100% completed
manufacture of seals and
adhesives.
15 Lime Plant 91,000 tonnes of Calcinated 98% completed
Lime
16 Refractory Plant Alumino-Silicate Refractory 98% completed
Bricks (43,400 tonnes)
Dolomite bricks (8,800 tonnes)
17 Oxygen Plant 426,000 tons 0f Oxygen, 98% completed
127,800,000m3 of Nitrogen,
2,130,000 m3 of Argon
1,020,000m3 of Hydrogen

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Industrial Linkages to ASP and Multiplier Effects on the Economy

A Steel industry like Ajaokuta has the capacity to revolutionalize the


Industrial and Economic sectors of the Nigerian nation. It must be noted that
everything for the convenience of man is made by machines. These
machines are made of metals, which are mostly steel based.
The prospects of Ajaokuta Steel Project on the economy can readily be
appreciated as we discuss its prospects, which are enormous both in direct and
indirect terms. These are briefly highlighted below;

Up-Stream Industrial Linkages


Development of Steel Industries like ASP promotes the exploitation and
utilization of steel-based raw materials, such as iron ore, coal, limestone,
dolomite and refractory clay among others. Apart from generating
employment opportunities, these activities would bring about much
development such as construction of roads, provision of electricity, provision
of drinking water, a boost in the transportation industry, construction of
markets, etc. For instance, the development of the iron ore mines at Itakpe, the
limestone and dolomite deposits at Ikpeshi and Jakura has direct linkages to
the Ajaokuta Steel Project. The mining of these deposits for utilization in iron
and steel plants have far-reaching economic implications for the immediate
vicinity and Nigeria in general. Provisions of infrastructural facilities such as
roads, rail-lines (Itakpe-Ajaokuta-Warri rail line) electricity, employment
opportunities etc, are catalysts to the development of the neighbour-hood of
the mines and beyond.
The up-stream industries related to steel production are:
i. Mining and Processing of Coking Coal, Iron Ore, Limestone, Dolomite,
Refractory clay etc.
ii. Petrochemical Industries involved in production of consumables for iron &
steel production viz: Tar, Solar Oil, Sulphuric Acid, Ortho phosphoric Acid etc
such as Nigerian National Petroleum Corporation (NNPC),Nigerian Gas
Company (NGC).
iii. Electric Power Companies e.g. Power Holding Company of Nigeria.
iv. Transportation Companies to carry out the haulage of ASCL Products, raw
Materials and consumables includes:- water transportation e.g. National Inland
Waterways Authority (NIWA), Lokoja, road transportation, and rail
transportation e.g. Nigerian Railway Corporation (NRC). -
v. Institutions involved in research, exploration and development of raw

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materials for iron and steel companies e.g. National Steel Raw Materials
Exploration Agency (NSRMEA), Kaduna, National Metallurgical
Development Centre (NMDC),Jos, Nigerian Mining Company (NMC), Jos.

Down-Stream Industries
The down-stream industries of steel are those that process the products and
byproducts further into other high revenue-yielding materials. The industries
can be grouped into heavy, medium and small-scale. Heavy industries include
those that engage in production of equipment and machinery, that is, capital
goods, while medium scale ones consist of those that produce consumer goods
like tins, cans, drums, containers, auto bodies, refrigeration equipment and
other consumer items. Small scale industries on the other hand, are those that
produce wire fasteners, wire gauzes, nails, bolts, nuts, hand tools, steel doors
and windows, etc.
The supportive role of steel in the establishment of heavy strategic industries
deserves special emphasis in this paper by reason of its long-term indirect
benefit in transforming many economies from the status of under-development
to the rank of developed nations. Some of these spin-off industries cannot be
embarked upon without a reliable local production of iron and steel, which
constitute great proportions of their input requirement. Obviously importation
of large quantities of steel for utilization in such strategic projects would lead
to a great drain of our foreign resources to other economies. Among such
projects are those involved in the manufacture of ships, railway lines, and
automobiles as well as defensive and offensive weapons.
A few of these sectors that would be impacted by Ajaokuta Steel Plant are
highlighted below;

Construction Sector
The demand for steel products in the construction industry includes Bars,
Rods, Angles, Sections, Plates, Sheets, Strips, Pipes, Wires, Galvanizing and
Corrugation etc. a majority of which are long rolled products (Rods) in
general. In the construction of structures, the demand for different products
varies. These steel products can be produced at Ajaokuta. Furthermore, I-
beams, channels, and other structures can also be produced at Ajaokuta's
Medium Section and Structural Mill. Indeed, had the backward integration
philosophy been carried out to its logical conclusion for example, a lot of the
structures used in erecting the complex itself and those of the nations
construction industry would have been met from its Medium Section and
Structural Mill.

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Agricultural Sector
Most investors in the agricultural sector like crop farming, Aqua culture or
Poultry farms require some degree of reasonable Mechanization. Most of these
large scale farming efforts have been of little effect due to the importation of
the input pesticides, herbicides, fertilizer, fish fingers, etc. which had no back
up facilities for their imported mechanical devices, such as tractors, etc. At
Ajaokuta Steel Plant, for instance, several simple mechanical tools have been
developed over the years that can make farming for the small scale farmer a
profitable delight, such as mechanized hoes that use no petrol, matchetes,
cutlasses, spades and shovels that are heat treated for long term use. The road
to meeting our own food needs as a nation lies in mechanized farming using
ploughs, ridgers, planters, harrows, and of course the establishment of
Fertilizer plants. The steel industry is primed to supply the input, iron &steel
raw materials. The basic steel products required to meet the demands of this
sector are bar shapes and flats (Stiffening for plate, sheet fabrication, and
ornamental iron work) which as indicated above can be produced at Ajaokuta
Steel Plant. Do many people know that, the Ajaokuta Steel Plant will,
during Steel production, also produce Ammonium Sulphate Fertilizer as a
by-product?

Defence Sector
The defence capabilities of a nation have to a large extent, depended on the
development of her steel industry. This position is corroborated by the
experience of India and Pakistan who have nuclear capabilities. Defense being
one of the most important functions of a nation, cannot solely depend on
importation, as no nation will readily export her hi-tech military hardware.
It is not by accident of history that our Defence Industries Corporation
experiment failed in the absence of a steel plant to support it. This is one area
where no other nation can do it for us. The application of steel to the defense
sector includes production of arms, ammunition, collapsible bridges,
structures, chains, military transport, weapons and weapons training, etc.
Defence consumes a lot of forging, castings, plates, strips, angles, sheets,
hoops, steel wire, etc.

Transportation Sector
i. Rails
The Medium Section and Structural Mill at Ajaokuta, which has an installed
capacity of 560,000 tonnes of channels, beams, etc. needed in heavy
construction industry can be expanded and slightly modified to produce
100,000 tonnes of Rails per year. As estimated, the tonnage of rails required
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by the Nigerian Railways Corporation to meet the new rail programme of the
Federal Government as well as the rehabilitation of the existing ones will be in
the neighbourhood of 955,680 tonnes.
In addition to these, the new light rail tracks proposed by Lagos State
government and the Federal capital territory for urban mass movements and
others amount to significant tonnages and can be easily produced at Ajaokuta.
Ajaokuta's input on these requirements can drastically reduce import. We
cannot afford to make the same mistake twice: Abuja and Indeed Lagos were
totally built on imported steel, thus, we are wiser for others than for ourselves
as a nation.

ii. Tanker Bodies, Trailers, Barges, Fire Engine Bodies, Drilling Rigs, etc.
Over a million tones of Itakpe iron ore has to be moved by barges downstream
of the Ajaokuta Steel Plant Niger River Port, to Delta Steel Plant within the
five months of the year when the river Niger is navigable. Barges are made of
plates and flat products. Tanker bodies, fire engine bodies, parts of cranes,
drilling rigs and trailers are also made of similar steel products.

iii. Ships -
The naval dockyard as much as the Niger dock company relies on imported
steel products to service ships. Most parts of the huge tonnages of which ships
are made are steel and related products. If the Niger dock company, which
consistently makes profits, relies on imported spares, obviously it can do better
if the spares are sourced locally at the Ajaokuta Steel Plant, the repair shops of
which can meet this need.

iv. Automobiles
The accelerated flat steel programme of the Ajaokuta Steel Project, when
implemented will boost the automotive industries in the country. There is only
one functional car assembly plant (Peugeot). The automobiles need of our
country is by importation. The now popular Luxurious Busses flying our roads
day and night are mostly from Brasil, and this is because Brasil has an
indigenous steel capacity. We should also know that, Tar (for the construction
of our roads) will be generated as a by-product during the production steel at
Ajaokuta.

V. Manufacturing Sector
Textile equipment, machinery, appliances, electrical power equipment, power
generation equipment, food processing equipment, cement plants, petro-
chemical refining equipment, small scale machinery, etc. constitute the
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manufacturing sector and are made from steel or steel related products. Their
annual spare parts demands per year, even at their present low capacity
utilization, would be above 100,000 tonnes per year. Both long and flat steel
products are consumed in this sector. With the completion of the 2nd phase of
ASCL, these materials can be produced locally and Ajaokuta Steel Plant is
very well technically situated for this. Engr. A.E. Ojobo, a consultant, in a
paper he delivered to NSE (Benin Branch), May, 2008, asserted that:
“Due to the low industrial base in the country (Nigeria), the sourcing of the
major equipment and machinery for the Power Project had of necessity been
from overseas countries. Unlike standard goods, these have to be made on
order as they are usually not available off-the-shelf. Their manufacture,
shipping and delivery to project sites could take up to 2 years.” This was in
explanation for reasons of power projects delays. But it could also be used by
Nigerians as to reasons to demand for the completion of the Ajaokuta Steel
Plant, our plant, as some of the projects referred to are now up to 4 years
behind schedule.

Petroleum Sector
The equipment and facilities that are relevant for Petroleum exploitation have
direct linkage to the Steel Industry. The main materials and spare parts needs
of the petroleum industry are made of Stainless Steel, Heat Resistant, Anti-
corrosion materials, Flat sheets and plates, seamless pipes and other special
steel alloys. The Rig is made of anti-corrosion and alloy steel to ensure its
rigidity, resilience and to be able to withstand corrosion occasioned by the
salinity of the environment and the ocean. The drill collars are constantly
under compressive stress and hence must be turgid. The drill bits must be hard
to be able to accomplish its task of drilling without shearing until it completes
its expected life. The perforation gun shell used for perforating the oil well
cement and its environment are made of steel with the special ability to
withstand thermal shocks. The "Christmas tree" and the pipelines are all made
of special alloy steels. In the Refineries, majority of the infrastructures and
equipment (referred to as tubular) are made of Iron and Steel and its alloys.
Hence TURNAROUND MAINTENANCE (TAM) of these plants cannot be
accomplished locally until a vibrant Steel Sector is in place. For the main time
our foreign exchange must continue to go to other countries for their benefits
and also provide employment for their teaming populations.

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Ancillary Industries
Small scale industries that supply spares and consumables tend to cluster
around steel plants because of various incentives and opportunities that abound
in the location of the plants. These incentives include among others,
availability of ready market, allocation of land in industrial estates; assured
required input raw materials source; greater scope for specialization of
products and availability of economic and social infrastructure. Thus, small
foundries, light forge shops, small machine shops, auto-workshops, popularly
referred to as Small & Medium Scale Enterprises (SMES), are usually strong
and well grounded due to the presence of steel plants. These industries further
contribute to the overall development of nations by way of employment
generation and increase in the GDP.

Other Prospects of Steel Sector to the Economy


We highlight below further prospects of Ajaokuta Steel Project on the
economy.

Technological Acquisition and Human Resource Development


Operations in steel plants are complex and require high level of technology
and industrial discipline. Hence, in nations where the plants exist, special
Technological skills of manufacturers of the Steel Plant abound. Furthermore,
Entrepreneurial skills and management techniques necessary for the
development of long-term technologies are developed. Besides, almost all
types of production techniques are practiced in steel plants. This makes the
plants veritable bases for scientific and technological research for industrial
application and for developing skills in operating, maintaining and managing
almost all types of industrial establishments. Many economies have therefore
been acquiring huge stocks of human capital needed for development in
this wise. Thus, by facilitating the development of appropriate technological
base, the steel industry contributes immensely to the economic development of
underdeveloped and developing nations, hence the appropriate name tag "the
mother of all industries".

Provision of Infrastructure for Industrial Development


Establishment of steel plants require enormous investments in provision of
economic and social facilities such as hospitals, roads, bridges, schools,
electricity and telecommunications. The projects also attract other economic
activities in the region where they are located, such as banks, insurance
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companies, markets, and artisans. The positive externalities that result from
the development of steel plants act as incentives to entrepreneurs for the
establishment of medium and small-scale industries within the vicinity of the
steel plants.

Generation of Financial Resources for Industrial Development


A substantial amount of steel products is exported directly and indirectly for
the purposes of foreign exchange earnings. In this way, many steel-producing
nations have been able to maintain favourable balance of payments with their
trade partners. Furthermore, the foreign exchange earnings are very useful in
funding other development programmes. In addition, steel producing nations
are saved from massive importation of steel products in the form of producer
and consumer goods. This import substitution releases huge amounts of
foreign exchange needed for industrial development programmes. An indirect
import-substitution effect also accrues when the products are utilised by down-
stream manufacturing firms to produce other goods. Furthermore, proceeds
from these products contribute significantly to increase Gross National
Product (GNP) of nations directly or indirectly with the resultant effect of
increase in economic growth.

Provision of Employment Opportunities


Ajaokuta Steel Company Limited, on completion at the 1st phase, will
generate about 10,000 jobs. This will progressively increase to about 20,000
workforces at the 3rd phase. The linkage effects on the economy, which
serves, as catalyst for industrial activities, through upstream, downstream and
ancillary industries will create far more jobs thereby reducing unemployment.
Furthermore it will encourage self-reliance of the populace.

This company is in Nigeria. Its rugged installed equipment (98% completed)


are still confirmed sound after repeated examinations. Its kind of technology
still provides 70% of the world steel production, so there is no question of
being obsolete as some may suggest. It is this same company, ASCL, that Dr.
Sanusi, General Secretary African Iron & Steel Association (2008 Steel
Summit held in Lagos) declared that it requires only five (5) days out of 365
days of oil revenue to see it completed and in full production with all the
attendant benefits to the nation. From the time Dr. Sanusi made this statement
to date, the country must have lost close to, if not more than 100 days of oil
revenue due to militancy and other nefarious activities. This same company
(ASCL), had it been in operation, would have provided employment to most of

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those who engage in the militancy, and thus guaranteeing the much desired
internal security and economic gains as desired in the 7-point agenda.

Conclusion
It could be very fashionable to conclude by citing an excerpt from a paper
presented by Engr. (Chief) P. U. Umunnakwe, the current chairman of the
Interim Management Committee of Ajaokuta Steel Company Limited and
National Iron Ore Mining Company, Itakpe. He wrote: Once upon a time in
this country General Ibrahim B. Babangida, GCFR, was the President,
Commander in Chief, Federal Republic of Nigeria. In 1985, a cabinet level
vote was to be taken after a cabinet debate on whether to selloff Ajaokuta Steel
Plant or not. The Honourable Minister of Steel then, Honourable Rilwanu
Lukman, realizing from the tone of the debate, that his would probably be the
lone vote for Ajaokuta Steel Project, appealed that before the vote was taken,
the Head of State should visit the plant first. The General agreed and invited
his entire cabinet to Ajaokuta.
After the tour of the steel plant, General Babangida was reported to have
commended the courage and vision of Alhaji Aliyu Usman Shehu Shagari, the
former President, who put all these structures in place within his tenure (4yrs)
and the General’s verdict on Ajaokuta Steel Project as he wrote in our guest
book on 28 November 1985 reads: “We had a most educative and instructive
visit. The completion of this project is a MUST to the industrial take off of
this nation. It must be supported.” (Capitals his). After the President and C-
in-C had cast his vote, none else had a contrary view.

By now, when we take a pragmatic look at the 7-point agenda we can visibly
see that, the Steel Technology has the potential capacity of providing the
ingredients required in the Power & Energy, Food Security (Agriculture),
Wealth Creation, Transport Sector, Land Reforms, Security, and Education.
And thus the 7-Point Agenda vis-a-vis Vision 20-2020 are on their way to
success.

Thank You and God Bless Nigeria.

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SOURCES OF DATA

(a) Detailed Project Report (DPR) on the construction, erection and operation of
Ajaokuta Steel Company.
(b) Budget and Planning Unit of Ajaokuta Steel Company Limited.
(c) Production Planning & Control Division of Ajaokuta Steel Company Limited.
(d) In-House Seminar papers on various Units of Ajaokuta Steel Company Limited.
(e) Corporate Affairs Unit of Ajaokuta Steel Company Limited.
(f) New Initiative s Division of Ajaokuta Steel Company Limited.
(g) Engr. (Chief) P. U. Umunnakwe, FNSE, FNMS, FIMM, Paper presented, May,
2009.
(h) Mr. Luke Onyekakeyah, Guardian Newspaper, August 19th , 2008.
(i) Alhaji Tanimu Yakubu, Special Adviser to the President on Economic Matters.
(j) Engr. A. E. Ojobo, Paper presented, NSE (Benin Branch), May 29, 2008.
(k) Earth Trends.

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