The news of Mr. Muhammadu Buhari, Nigeria president refusal assent to the Ajaokuta Completion Fund Bill was a heartbreaking to many Nigerians, especially some who understand the role of industrialization to job creation, economic growth and development.
The president in his letter sent to the country federal legislature said appropriating $1billion from the Excess Crude Account (ECA), is not the best strategic option for Nigeria at this time of budgetary constraints. He argues that that the nation cannot afford to commit such an amount in the midst of competing priorities with long-term social and economic impacts that the funds can be alternatively deployed towards.
Worse still, the Nigerian government had spent an estimated US$7 billion (N1.1 trillion) on the biggest integrated steel company in West Africa, Ajaokuta Steel Company. In 2004, the company was concessioned to Global Infrastructure Holdings Limited (GIHL), an Indian firm. But this hasn’t revitalised the steel company. In the last 30 years, monthly salaries are paid to hundreds of workers who produce not even a bar of steel. A government committee set to proffer solution to this state of affairs recommended scrapping Ajaokuta Steel because it is a drain on the nation’s resources.
Delta Steel Company was closed by a court verdict terminating the management of the company by Indian investors who were alleged to be indebted to a consortium of three banks to the tune of N31 billion (about US$207m). In 1998, it was revealed that 16 years into the company’s operation, besides N1.2 billion spent on it during construction, it has not received any other funding from the government. The company had 110 management staff, 2058 non-technical and 316 technical staff. Besides the job it created, it had 4 primary schools, a quality technical college graded as the number four best in Nigeria, hospitals and technical training institute, 5,200 housing located in four industrial estates.
The Ghana Steel Industry fares no better too. It is facing imminent collapse. In 2010, Ghana lost GH¢60,512,100 (about $29m) to what it termed illegal exportation of ferrous scraps. This was linked to the lack of capacity of the local steel companies to produce. This action is said to be a threat to the 3,000-strong workforce found in the 5 steel companies in the country-Tema Steel Company, Ferro Fabrik, Western Steel, Special Steel, and Sentuo Limited. More worrisome, when Tema Steel Company could not survive the open market completion it shut down its furnace unit. Over the last 10 years, similar scenarios have led to about 60 timber companies folding up with the attendant loss of about 30,000 jobs.
As at 1991, Burkina Faso had discarded the pursuit of industrialisation and embraced full privatisation like its sister countries across the region. This led to the disengagement of the state from productive and competitive sectors and replaced duty bearer for the assignment with the private sector. This resulted in the transfer of thirty-one (31) companies to the private sector via sales of shares, increases of capital, transfers of asset and privatisation of management. However, these companies held the business fabric of Burkina economy and a great number of people lost their jobs arising from the privatisation policy.
West African states have joined the rest of the African continent in approaches to accelerate development. The New Partnership for Africa’s Development (NEPAD) was developed as a broad incorporated sustainable development initiative for the economic and social restoration of Africa with key objectives to eradicate poverty, position African states on a course of sustainable growth and development; stop the marginalisation of Africa in the globalisation practice; boost Africa’s full and beneficial integration into the universal economy; and step up women empowerment.
In the same vein, there was the Abuja Treaty in June 1991, at the summit where African Heads of State and Governments put in place the African Economic Community (AEC) to promote economic, social and cultural development as well as African economic integration in order to expand its self-sufficiency.
Tall as this order of self-sufficiency might seem, it was the subject of a recent discussion in Abuja the capital city of Nigeria in July 2013. The ambition of that discussion for West Africa was to chart ways for an industrialised continent in the year 2063. It set clear targets of a free trade area by 2017; Customs union by 2019, and a common market by 2023. Participants deemed it important to have 10 to 15 potentials of world trade by 2040. They argued that African must have a clear view of what development is and must identify variables that have the potentials to shape the future and determine what its future programme becomes.
Looking at intervening variables, attaining development in West Africa is not likely to be guaranteed 50 years from now. Across the region, political parties and its leadership do not fight because of disagreement over developmental policies, but who controls the larger resources of the state. And on the responsibility of the state to pursue development, more energy is channeled towards the search for foreign investors and privatisation of state economies. Unfortunately, private sector creation in West Africa is a creation of political leaders to siphon state resources. Global testament has shown that the private sector cannot bring the needed transformation, but rather the government must lead the process which is a key missing link in West Africa.
Audu Liberty Oseni