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Ajaokuta Steel gets zero allocation for capital projects

DECEMBER 27, 2013 BY OKECHUKWU NNODIM 6 COMMENTS



Ajaokuta Steel Company, Nigeria
| credits: File copy
Despite operating at a nearly comatose state, N3.921bn has been allocated to the Ajaokuta Steel Company Limited in the 2014 budget proposals currently before the National Assembly. The amount is mainly for personnel, overhead and recurrent costs, while curiously, nothing is set aside for capital projects.

The ASCL is a Federal Government-owned firm that currently runs skeletal services.

The N3.921bn allocation indicates a rise of N1.11m when compared with the N3.81bn approved for the firm in the 2013 budget.

The Federal Government had in the 2013 budget allocated N28.4m for capital projects, but did not see any reason for such in next year’s proposals.

In the 2014 budget estimate for Ajaokuta Steel, N3.821bn was allocated as total personnel cost, N100m was for total overhead, while total recurrent was put at N3.921bn. The column for total capital had the figure zero.

Findings showed that ASCL, which was originally built to produce steel and iron rods, had the highest budgetary allocation under the Federal Ministry of Mines and Steel.

Just like the ASCL, the National Iron Ore Mining Project, Itakpe, which is another agency under the ministry, had nothing allocated for capital projects, whereas a total of N1.587bn was allocated for recurrent expenditure.

Of this sum, N1.51bn was for total personnel; N80m for overhead and N1.587bn for total recurrent.

The ministry itself got a total of N2.376bn as total allocation. A breakdown of the sum shows that total personnel cost is N857.6m; total overhead, N507.2m; total recurrent, N1.36bn; and total capital cost, N1.01bn.

The Nigerian Geological Survey Agency got N1.11bn as total personnel cost; N299.1m for overhead; N1.41bn for total recurrent; while N423.7m was allocated for total capital. The overall budget for the agency was put at N1.834bn.

According to the budget proposals, the total allocation for the Federal Ministry of Mines and Steel, and all its agencies is N12.61bn

Meanwhile, analysts and employees of ASCL have decried the neglect of capital projects in the steel company.

An official of the major union in the firm, the Iron and Steel Senior Staff Association of Nigeria, told our correspondent that the government should work towards reviving the vital units in the firm so as to ensure the production of iron rods and rails.

The official, who pleaded not to be named because he was not authorised to speak on the subject said, “We are working but I must say that it is not at optimum capacity. There is a need for the government to revive some of our core equipment so that we can produce optimally.

“Zero allocation for capital projects is not a good thing for this company, and I hope the government will review that.”