AJAOKUTA STEEL COMPANY 1979 – 2007

ABSTRACT

Steel  is  an  important  element  of  the  industrialization  process.  A  nation  with  a  highly developed steel industry is often characterized by heavy industrial development. Countries like USA, Britain, Japan, China and Russia were known to have particularly paid keen attention to steel development. Using historical method and modernization framework, the study found that Nigeria has been pursuing industrial policies that are externally propelled. From the ISI to ESS, Nigeria has been unable to attain industrial developments. The failure of policy development as well as policy implementation is major causes of the inability of Nigeria to attain industrial development. The consequences are that unfavorable balance of payment, less than 6% contribution of manufacturing to GDP and underdevelopment remain the norm. Though Nigeria attempted to jumpstart her industrialization through the Ajaokuta Steel  Company  since  1979,  it  has  remained  unproductive.  ASC  was  conceived  as  an integrated steel plant with a production of capacity of 2.1 million tons of steel per annum in the first phase which was to be expanded to over 5 million tons in the final phase. Despite huge financial and material wealth of the nation being expended on the company, it has remained a monument that exemplifies the failure of purposeful governance in Nigeria. The study using oral interview, archival materials and relevant literatures found that there are many challenges facing the company; governmental policy inconsistency, monumental corruption, external factors, and lack of governmental will to actualize the project. The study is relevant to the ongoing discourse to diversify the economy from the mono-culture of dependence on oil. Whereas the West continues to discourage state participation in development enterprise, companies like ASC are hardly known to have been handled by private companies in other climes. This is as a result of massive investment requirement which has a long gestation period; therefore exploring concessions by the FGN has proved to be unproductive. The dependence on foreign preferred solution to problems in Nigeria has been met with catastrophic failure. The study proposes and inwardly developed industrial policy to solve the problem of Nigeria’s industrialization problems.

CHAPTER ONE INTRODUCTION

The importance of steel has led to its being used as an index for measuring economic advancement. This is because of its direct and indirect linkages. Iron and steel are the most important requirements for all manufacturing, development of machinery, metal products, transportation or agricultural equipment among others.1Indeed, all industries depend on steel. Steel  development  has  been  widely  regarded  as  a  vital  requisite  for  industrialization.2

Successful industrial countries such as China, England, Japan and America among others have identified the centrality of development of iron and steel to industrial development. They placed the development of steel industry at the top  of their priority. This  can be buttressed by the position of Attah N.E., who opined that the importance of iron and steel cannot be overemphasised as it has  the capacity to foster the industrialization, especially as it has direct and indirect linkages to other sectors of the economy.3

Osita  Agbu noted that  one of the most  important  factors  inhibiting  Sub-Saharan African development is her inability to organize her technological development, which primarily should have been a basis in the development of her iron and steel industry.4  The industrialization of Nigeria however has been a constant policy pursuit of all the various administrations that have governed the country since 1960.5Njoku O.N. noted that the place of steel as the heartbeat of modern industrialization was not lost on the Nigerian government as a result of their awareness of the opportunity it provides for limitless range of industrial and construction works.6

The early attempt to industrialize Nigeria started at the tail end of colonialism. At the

closing moments of colonization and early periods of Nigeria’s independence, there was a

concerted effort at Import Substitution Industrialization (ISI) which is a strategy aimed at increasing domestic production or developing local production capacities in areas where importation of goods were previously done.7  The aim of ISI is to help facilitate industrialization, while also plugging leakages. The ISI strategy proved to be inefficient for Nigeria’s industrialization because it lacked the proper linkages that could have transformed Nigeria technologically.8The strategy equally failed in Nigeria because it came at a high cost, it was non-competitive, and it was focused on producing consumer products rather than a more sustainable intermediate industry. It equally fostered more dependency as Nigeria at the time lacked the necessary requisite knowledge of installed technologies.9Obi-Ani P. particularly argued that the import substitution strategy can only delay Nigeria’s ascendance to industrial knowledge, a fact which he argued the Nigerian political  elites recognized overtime.10

Although few countries especially (Brazil and India) were able to carefully apply the ISI to grow internal production capacity, by carefully extending it to intermediate and capital goods, but these are largely exceptions.11  Evidence show that most countries that attempted the strategy especially in Sub-Saharan African countries (Nigeria for instance) could not use the strategy to achieve industrialization. More so, one of the main objectives of the ISI is to save scarce foreign resources, again this failed, as experience suggests that the development of industry or assembly operations saved little foreign exchange for Nigeria.12

Despite the relationship that has been established between iron and steel development

and industrialization, Agbu argued  that African leaders have not utilized the window it creates for development. He argued that Africa’s problem cannot just be associated with economic growth, but the process of fundamental transformations which has made it impossible for African leaders to cope. He pointed out that the society is unable to catch up

with  the  technologically  advanced  countries  who  give  no  room  to  “technologically disadvantaged entities”.13

Nigeria particularly has produced very little steel since 1980.  In figures, Nigeria produced a sum total of two million, eight hundred thousand and two (2,800,002) tonnes of steel between 1980 and 2004; producing only twenty thousand (20,000) tonnes in 1980, and forty thousand (40,000) tonnes in 2004 respectively. Whereas in the same period under study, Brazil produced fifteen million, three hundred and thirty seven thousand (15, 337000) tonnes of steel in 1980 alone, this was doubled in 2004, as figures show that thirty two million nine hundred and nine (32,909,000) tonnes of steel was produced in 2004 alone. Similarly India produced nine million, five hundred and fourteen thousand (9, 514,000) tonnes of steel in

1980 alone, while in 2004 alone, production jumped to thirty two million six hundred and twenty six thousand (32,626,000) tonnes of steel.14

Theoretically, Nigeria’s quest for economic growth and social transformation can be located in the theory of modernization. Nigeria has been seeking to radically transform her society from an economy based on traditional methods– to a modern economy based on advanced technology,  and general social transformation through the development of her human and material resources. Modernization theorists such as W.W. Rostow viewed modernization as multi-faceted stages of social and economic transformation. He argued that there are specific stages of modernization in which a traditional society moves to a modern society.15

However, the Dependency theory argues that the unequal world economic system have only accentuated the positions of poor states. Developed in Latin America through the Research of the Economic Commission for Latin America and the Caribbean (ECLAC), dependency theorists such as Andre Gunder Frank, have argued vehemently that development

in third world countries are not necessitated by internal dynamics but as a result of historical process of colonialism that has lumped the third world countries into the capitalist system, this has led to a development of core versus periphery relationship.16

While the modernization and dependency theory appear to have divergent view of development, a major converging point especially in the case of Nigeria’s development is the fact that both the Modernization and Dependency theories puts industrialization as a core element of development. However, while the modernization theory places industrialization as a condition for Takeoff, the Dependency school argue that industrialization in the third world countries will rather be stifled as a result of her engagement with the developed world. This appears to be the case, as Nigeria’s engagement in the world capitalist economy has not resulted in the development of her industrial base. The absence of a developed iron and steel industry is a pointer to this fact.

More so, Nigeria has been pursuing an economic model based on the neo-liberal economic policy. This has become part of her crises of development. Nigeria thus had been taking instructions and advice from the capitalist West on how to develop her economy through attracting foreign direct investment (FDI), liberalization of her economy and democratization.17  However, this appears not to have had the “desired” effect, considering that despite adopting a western economic model, the structural foundations necessary for the transformation of the society is absent (example, lack of viable capital industries).

Indeed,    Brett  E.A had  warned  that  as  Third World  countries  seek  development models that will provide the intellectual and structural basis for the development of her economies, they must be wary that Western models can only provide a reference point, they cannot be transplanted unmodified from Western societies to the Third World.18

Nigeria’s industrialization drive did not reflect a synergy with indigenous knowledge; this led to her seeking of technological transfer. By cooperating with countries such as Russia to  develop  her  steel  industry,  Nigeria  had  hoped  that  it  will  amount  to  an  immediate translation  to  industrialization.  This  development  pattern  appears  unsustainable;  this  is because the practical knowledge of time and place which would have led to the utilization of knowledge was absent.19 Indeed, it has led to the creation of an expensive but useless monument.20In other words, Nigeria has neither been industrialized nor has she been able to recover the huge financial losses that followed the attempt at developing her steel industry.

While colonialism hindered industrialization in the Third World, Nigeria’s colonial experience does not appear to have shaped the drive of the national leaders towards development, especially in the industrial sector. India emerged out of colonialism as a technologically disadvantaged country with high rate of poverty and economic challenges. However, by careful planning and a conscious development of her industries using cultural and geographic resources, as well as investment in capital industries such as steel, China and India have emerged as global leaders in industrial development especially in the steel industry.21

The Nigeria government conceived the Ajaokuta steel company as the bedrock of

Nigeria’s industrialization. It was meant to be an integrated steel plant developed to produce

1.3 million metric tons of steel per annum in the first phase, 2.6 million tons per annum in the second stage and 5.1 million tons per annum at the third and final phase, through the blast furnace technology.

However, the inability of Ajaokuta Steel Company to produce liquid steel despite the huge financial and human resources committed to it amounting to over ten billion dollars presents a problem. Certain questions thus needed to be raised: first, what are the rationales for   a   steel   industry,   how   can   governmental   policies   explain   Nigeria’s   quest   for

industrialization? To what extent did monumental corruption and high stake politics at local and international levels undermine Nigeria’s attempt at industrialization? What went wrong with the Ajaokuta steel company? In the light of such allegation that Russia intentionally delayed the construction of the company and even adopted an out-dated blast furnace technology for the development of Ajaokuta Steel Company, it is necessary to ask: does an outdated blast furnace technology amount to a useless technology? Was it not possible to use the technology in the meantime to even test run the site and change it subsequently?

Also, how have the various concessions of the steel company to contractors such as SOLGAS (American), Global Holdings Limited (GIHL)(India) and Kobe steel (Japan) fostered or undermined the company? An immediate answer to these final questions can be located in the actions of the GIHL which carted away several vital technologies from the Ajaokuta steel company for use elsewhere.22Indeed, these questions are relevant in understanding the challenges of developing a viable steel industry in Nigeria.

The study argues that above others, governmental decisions were the most potent factors that have undermined the Ajaokuta steel company, in addition to other challenges it has faced. From the conception to the location and subsequent developments in the company, the Nigerian government had entangled the company in politics. More so, the government had not envisioned the company to tap from the versatile human resources abundant in the country. Rather the government planned a wholesale transfer of alien technology, thus it backfired tremendously.

Statement of Problem

Nigeria has not been able to develop a viable steel industry despite the huge financial investment, Ajaokuta steel company which was meant to be the bedrock of Nigeria’s industrialization has not been developed to roll out liquid steel. Scholars gave approached the issue  of  Ajaokuta  Steel  Company  from  various  perspectives.  Osita  Agbo  argued  that

Ajaokuta Steel Company failed to function because of the nature of cooperation sought to develop  the  company,  he  averred  that  Nigeria  should  cooperate  with  Japan  in  order  to develop the company.23 Marietu Tenuche and N.E. Attah argued respectively that the concession policy of government did not allow the steel company to function optimally and produce liquid steel.24  However, these scholars have not adequately examined the political perspectives of government that have shaped policy development and implementation and how it affects Ajaokuta Steel Company.

This   research   thus   is   an   effort   at   examining   the   policies   of   government, implementation and failures using a political perspective. The main problem of the research is to examine how political decisions influenced policy development and implementation with regard to the Ajaokuta Steel Company.

Purpose of the Study

The purpose of this study is to examinethe development of Ajaokuta steel company from 1979 to 2007. the study reviews industrialization policies in nige4ia and how it affected the development of the Company. The study also identifies the challenges to Ajaokuta steel company, finally, the study recommends how these challenges may be mitigated.

The significance of the Study

The significance of this study is as follows:

–    To  indicate  how  the  revival  of  Ajaokuta  Steel  Company  can  help  diversify

Nigeria’s economy.

–     To  encourage  government  and  stakeholders  to  examine  previous  pitfalls  that havehindered the attainment of the goals of Ajaokuta steel company in order to avoid such mistakes going forward.

–    To contribute to existing knowledge on Nigeria’s steel development.

The scope of the Study

The focus of this study is on Ajaokuta Steel Company 1979-2007. The choice of the topic was informed by the growing interest in Nigeria’s industrial development and the cooperation to be sought to attain industrial growth,especially in the steel industry.

The time span of the work is 1979-2007. The choice of 1979 is informed by the fact that the contract for the development of Ajaokuta steel company was signed in 1979 by the Shehu Shagari led administration.   It terminates in  2007 because that was the year the Obasanjo led administration concession the company to Global Holding Limited. The year also helps the analysis of the consequences of the concession on the company.

Sources, Method and Organization

To carry out a study on industrial development in Nigeria, historical sources and other relevant sources from economics, science, political science, and other relevant disciplines were sourced. The study thus adopted a multidisciplinary approach, in the collection of data while the descriptive method was used to analyse the data collected. The study employeda qualitative  and  quantitative  method  of  research,  thus  journal  articles  and  other  textual materials were utilized in this study. More so, numerical data collected from the annual abstract of statistics from the NBS, Abuja were used in the study.

The data for this study were derived from primary and secondary sources. Primary sources includedoral interview with workers and administrators in Ajaokuta Steel Company as well as relevant stakeholders and the academia; also, primary sources used include government documents and archival materials. Archival materials from the National Archives Kaduna was especially useful to this research, one of such materials is the report of R.A Bones on the feasibility of locating a Steel company in Ajaokuta.

Oral information was checked with what has been written, and written sources were compared with opinions of active participants in the Ajaokuta Steel Company administration.

This was in order to (in)validate any of the sources. Secondary sources that wereemployed in the study included a number of literature such as books, journals, seminar papers, magazines, newspapers, and theses among others which are relevant to the present study.

Organization

This thesis is divided into five (5) chapters. Chapter one is the introduction and covers the background to study, the statement of the problem,the purpose of the study, significance of the study, scope of the study, method, source and organization, as well as the theoretical framework and literature review.

Chapter two discusses Nigeria and the quest for industrialization, rationale for the steel industry and steel industries in Nigeria before the Ajaokuta Steel Company.

Chapter three explains the birth of Ajaokuta steel company geographical location of Ajaokuta steel company, geological formations and the choice to locate the industry in the area as well as the major sites in the Ajaokuta steel company.

Chapter four looks at the challenges ofmeeting the mandate of the steel company, contract termination and concessions of the company, as well as seek answer to what went wrong?

Chapter five explores alternative development strategies for the Nigeria steel industry by way of a recommendation. The chapter contains the summary, conclusion and recommendation.

Theoretical Framework

Matunhu J. argues that the way states and development specialists rationalize how to commit economic resources is influenced by their level of persuasion towards specific theories.25 GoranHyden, on the other hand, contends that the debate around development has only had little input from Africa, This, according to him was as a result of the power relations

in  the  world.  He  argued  that  the  strategies  African  leaders  have  adopted  so  far  only exacerbate the situation. And that it is the international community that has helped set the Africa development agenda.26

To aptly capture the aim of this study, two theoretical tools are applied namely,

dependency theory and international cooperation theory. These theories are important as it will help explain the reason why Nigeria started her industrialization process and in doing so, sought assistance from Russia by way of cooperation.

Dependency, according to scholars such as Osvaldo Sunkel, Vincent Ferraro and Theotino Dos Santos, is a historical economic development in the world in terms of external influence which favours some countries to the detriment of others, thereby conditioning the economy of a certain group of countries to the development and growth of another.27

Dependency theory intellectually emerged in Latin America among scholars who were dissatisfied with the status of Latin American economies. However, the development of the theory is often credited to the Director of the United Nations Economic Commission for Latin America, Raul Preibisch and his colleagues. They contend that despite the promise of economic growth beneficial to all according to the neoclassical economic theorists, economic growth in the richer countries did not benefit or lead to growth in the poor countries.28In fact, economic growth in those industrialized countries often led to serious economic problems in poorer countries.

Therefore, the dependency theory was developed as a coherent criticism of the dependent and modernization theory. It was established as an entirely new approach for explaining and understanding the political and economic world order. Andre Gunder Frank who  was  among  the  pioneers  of  the  theory  viewed  the  world  economic  system  as  an extension of imperialism and colonialism hitherto perpetrated by the World Great Powers. Using  Latin  American  countries  as  a  basis  for  analyses,  Andre  Gunder  Frank  ‘validly’

explained that capitalist countries in the ‘North’ gave rise to the underdevelopment of the

‘South’ by maintaining an order of dominance and supremacy over the South.

The basic assumption of the theory that is of importance to this study is that the state is the unit of analysis, dependency characterises the international system, which fosters the unequal  relations.  Also,  external  factors  are  important  to  economic activities  within  the boundaries of a nation and That the relations between the centre and periphery are dynamic and reinforced or intensifies the unequal patterns.29

Indeed, as Garbielyan Akop explains the dependency theory: “…the whole world is presented as an artificially unified system of amalgamated socio-economic order with the overwhelming supremacy of the leading developed countries…that exert imperialism toward the rest of the world.30 This scholar viewed imperialism as constraining the development of the periphery, whose main responsibility is to work and satisfy the needs of the developed countries.

Some criticisms of the theory are that the dependency theory has lost its relevance among modern theories of development; that it has been unable to prove its basic thesis scientifically  and  it  does  not  provide  exhaustive  empirical  evidence  to  support  its conclusion.31

Indeed, Nigeria as a state in the world economic system is inextricably caught in the web of the unequal World Economic System. This perhaps is the cause of her dilemma in her quest for development. As a result of her industrial backwardness, Nigeria is unable to partner with her Western allies to develop her economy, particularly her industrial base, since it will ‘endanger the supremacy’ of the West over Nigeria.

The dependency theory is relevant to this study as Nigeria is used as a unit of analysis in her relations with the developed countries. Nigeria’s quest to develop her industrial base tangles  her  in  high  stake  politics  that  saw  her  running  to  Russia  for  assistance  while contesting with the stiff resistance of the agents of imperialism (International Monetary Fund

‘IMF’) that arguably do not hope to see Nigeria attain industrialization.

John Rapley argued that in those days, development was considered largely synonymous with industrialization.32Rapley explaining development enthused that development had the dual aim of raising the standard of living while at the same time aiding the industrialization of a country’s economy.33Michael Sodaro and Steven Smith argued that theorists of the 1950s and early 1960s viewed the process of development as a series of successive stages of economic growth through with all countries must pass, this was based on the Rostovian conception of modernization.34  They pointed out that it was primarily an economic  theory  of  development  in  which  the  right  quantity  and  mixture  of  saving, investment and foreign aid were all that was necessary to enable developing nations to proceed along an economic growth path that historically had been followed by the more developed countries. Development thus became synonymous with rapid aggregate economic growth.35

In the light of this, Nigeria’s aim at developing her industries was to quicken the pace of development and follow the path to modernity. Construction of Ajaokuta steel company was an attempt at providing a solid base for the industrialization of the country which will, in turn, lead ultimately to development. In doing this, Nigeria sought the assistance of Russia resulting in the signing of the Global Contract in 1979, this cooperation can be explained using the International Cooperation Theory.

Literature Review

There is a need to review relevant literature in order to locate the existing knowledge on the subject and situate the gap the present study intends to fill. The review of literature will commence from the real needs that drove Nigeria to seek industrialization, then the ideological motive of cooperation is explored as well as literature on steel development in Nigeria and challenges the industry has faced.

Faluyi E.K in “Industrialization under Colonial Rule” explained the nexus between colonialism and industrialization in West Africa (by extension Nigeria).36 He averred that the general policy of the British colonial rulers was aimed at fulfilling the imperial mission of obtaining markets for products of the British industries. This policy ensured that the British colonialists invested very little in the industrial development of the colonies.  Faluyi posits the reasons for this as not farfetched:  if industries were encouraged, the cheap raw materials, labour and unprotected markets for industrial manufactures which dominated the motives for exploitation would have been shared between the imperial and the home industries. In order to avoid such sharing or competition, they ensured industries were not established or encouraged.

Faluyi’s work explains the reasons for the underdeveloped industrial base inherited from the colonial governments. He further noted that even where attempts at industrialization were made, it was mere tokenism, it was only aimed at securing a balanced economy that will ensure production at lower costs. This led to the introduction of processing factories such as cotton ginneries in Kano, Palm oil mills at Apapa and Opobo among others.37  In all, Faluyi noted that most of the industries established were merely import substitution which has very low linkages and was not aimed at developing industries or any form of manufacturing in the colonies. The essay explains the historical reason behind Nigeria’s lack of industrialization, thereby supplying the present study with reasons for Nigeria’s industrial drive.

Ugbor F. “Twenty-Five Years of Industrial Growth in Nigeria” compared and contrasted the nature of Nigeria’s industrialization before and after independence.38 He noted that prior to independence, almost all critical sectors of Nigerian economy were controlled by a few (large) colonial trading enterprises, who were not willing to establish manufacturing industries since it was   capable of undermining their interests. Thus, the pre-independence industrial sector was based on semi-processing of primary raw materials for export. After independence, Nigerian leaders became directly involved in the industrialization process by huge investment in industrial enterprises and projects. Thus manufacturing facilities were established which led to a progressive increase in the number of industrial enterprises.

The author considered the development of the various national development plans between 1962 and 1983 and their impacts on industrial development. The author revealed that in line with these plans, efforts were made towards the development of the Basic Metal Sectors which culminated in the Nigeria Steel Development Authority (NSDA) which attempted to develop various steel plants in Nigeria such as the Ajaokuta Steel Company, Delta Steel Company and the Rolling mills at Katsina, Osogbo and Jos respectively. The author, however, highlighted the constraint of industrial development in Nigeria, some of which include institutional and administrative bottlenecks, dependence on imports, foreign exchange constraints and infrastructural problems among others. The work is useful to the present study as it highlights the constraints to industrialization in Nigeria. Some of these constraints will be interrogated in the present research.

Ohimain E.I. in “The Challenge of Domestic Iron and Steel Production in Nigeria” argued that Nigeria has had development in the oil and gas industry, telecommunication, and cement manufacturing industries; however, there has been inadequate development in the steel industry.39  The author noted that Nigeria’s aim to achieve her potential of being the strongest economy in West Africa has been hindered by her inability to develop a vibrant

steel industry. The author averred that despite the huge investment in the steel sector, the Ajaokuta steel company and the Delta steel company are moribund, thus, the nation has been forced to meet her steel needs by the importation of steel materials from countries like Japan, Germany, and China among others.

The Author reviewed various policy and legal frameworks on steel development in Nigeria  and  noted  that  there  are  policy  inconsistencies,  especially  in  the  vision  2020 document that forecasts a steel production that will amount to 12.2 million tonnes of steel. He noted that the privatization of various steel infrastructures in Nigeria was not done in a transparent way that would have ensured optimum productivity in the long run. He noted that though there are inadequate raw materials for steel production, the enabling environment has not been created for the adequate utilization of the available ones such as coal, iron ore and limestone among others, and thus has not led to steel production in Nigeria. The author concluded that the challenges of steel production in Nigeria were numerous, some of which include inadequate raw materials, inadequate policy and lack of policy implementation, technical inadequacies among others. He argued that except these challenges are overcome; Nigeria will be unable to reach her desired projection for steel production in long run. The author’s argument is useful to this study as it shows some of the major challenges that confront the development in the Nigeria steel industry. However, the author did not examine cooperation in the development of Nigeria’s steel industry which is the aim of this study.

From the 1970s onward, there was a growing sense of cooperation between Nigeria and Russia; this led to several treaties on technical and scientific cooperation being signed. Nwani.A.Oand Kuznetsov G. sought to explain this cooperation and how it helped the development of Ajaokuta Steel Company.

Nwani.A.O  “Technical  and  Scientific  Cooperation  between  Nigeria  and  Eastern

European  Countries”  traced  the  motive  of  Nigeria’s  technical  cooperation  with  Eastern

European Countries.40Nwani reviewed the relations between Nigeria and Eastern Europe and revealed that though there was a measure of hesitation in the 1950s and early 1960s to relate with countries of Eastern Europe, tremendous changes occurred between the late 1960s and

1970s that led to tremendous engagement and cooperation in different fronts (trade, economy and  industries);  this  led  Nigeria  to  leverage  on  the  cooperation  to  promote  technology transfer. However, Nwani argued that it is erroneous to believe that  technology can  be imported from industrially advanced countries. Technological development, he argues, requires the translation of knowledge into concrete production, taking note of the issues of designing,  practical  and  useful  scientific  knowledge  to  the  receiving  country.  Nwani concluded that any form of technology transfer without a base for stimulating indigenous entrepreneurs and technical base with necessary linkages will be unsuccessful. Thus, the attempt at cooperating with Eastern Europe to develop Nigeria’s technology was only a guise for the accumulation of economic gains on the part of the Eastern Europeans. The essay is useful  to  the  present  study  as  it  enables  one  to  understand  the  motive  behind  Eastern European motive for cooperating with Nigeria to develop her industries. The essay, however, was generally discussing the cooperation between Nigeria and Eastern Europe, it was not specific about Russia, nor did it treat the development of Ajaokuta Steel Company; this study intends to fill this gap.

Kuznetsov G. in “Economic Cooperation between Nigeria and the Union of Soviet Socialist  Republic”41   explained  the  development  of  friendship  between  the  USSR  and African states as having elements of anti-imperialistic struggles, genuine equality, political and economic dependence. He argued that Nigeria and USSR have been developing their economic and technical cooperation on a long-term and mutually beneficial basis; pointing towards the development of Ajaokuta Steel Company as a major indicator of that mutual economic  basis.  The  author  also  described  the  cooperation  between  Nigeria’s  Nigeria

National Petroleum Company (NNPC) and USSR that led to the construction of two oil product pipelines of over 900km with a capacity of 18.7 million litres. Indeed, the author concludes that due to the reciprocal efforts, economic cooperation between Nigeria and the Soviet Union was getting more fruitful. However, one can question these assertions, considering  Nigeria’s experience with  the Ajaokuta Steel  Company which  has  failed  to produce steel as envisaged during its construction. How mutually beneficial is Nigeria’s technical cooperation? This study will engage this question in order to get a balance sheet.

In  a  similar  vein,  Kuznetsov  G.  in  “Technical  Cooperation  Involving  Training National Personnel between Nigeria and the USSR”42  describes how Nigeria and the USSR entered into technical cooperation that translated into the training of Nigerian nationals by the USSR. The author noted how through technical cooperation in schools and specific institutes, the USSR has been training Nigerians in the area of construction, development and operation of industrial projects. The author revealed that between 1975 and 1985, over 1600 personnel have been trained through the USSR. This personnel were to serve as the base for the Ajaokuta Steel Company. These training covered various aspects of steel making; also, the establishment of the metallurgical training complex in Ajaokuta was noted by the author. The work is relevant to this study as it provides relevant data about Ajaokuta Steel Company. However, the work was generally reviewing the impact of technical cooperation between Nigeria and USSR, it did not specifically isolate Ajaokuta for critical study, neither did it reveal the fact that Ajaokuta Steel Company did not meet up with the expectation of all and sundry, an area this study will cover.

Some scholars have studied the Nigerian steel industry with interest in locating the challenges and options available for steel development. John Ade Ajayi et al explained the challenges facing the Nigerian steel industries, while Noah Echa Attah examined the consequences of failed cooperation’s using Ajaokuta steel company as a case study, Osita A.

on the other argues vehemently that Nigeria should pursue cooperation with Japan in order to seek development in her steel industries.

Ajayi J.A et al in “Sustainable Iron and Steel Production in Nigeria: The Techno- Economic Backbone of the National Development”43contend that the continued importation of steel to Nigeria cannot lead to the development of the country. They aver that importation of steel is harmful to the Nigerian economy as it leads to unemployment, dwindling of foreign exchange, and the high cost of construction among others. They pointed out that despite steel production rising globally from 28 million tonnes in the early 20th  century to about 781 million tonnes at the end of the century, steel production in Nigeria has remained virtually a mirage.  They argued that as economies grow, steel consumption equally grows, thus there is a need for a complementary growth in steel production and consumption.

Some of the challenges of steel production in Nigeria as alluded to by the authors are; lack of political will; weak technological base; lack of systemic manpower development; and lack of synergy among the various sectors involved in the process of steel making in Nigeria. Thus, they recommended that more positive, proactive, pragmatic and progressive action should be taken in the development of Nigeria steel industry. The essay is important to the present  research  because  it  highlights  some  challenges  facing  Nigeria  steel  industry. However, it was generally capturing the challenges of Nigeria steel industry. The present attempt is focused on Ajaokuta steel company, it is hoped that by using a specific case, one can understand the broader challenges the Nigeria steel industry is confronted with.

Attah N.E. in “Ajaokuta Steel Company of Nigeria and concession: Counting the Human Cost, 2003-2010”44 discusses how liberalization policy of the Nigerian state has hurt the Nigerian economy. The author explained the liberalization policy of the Nigerian government as causing discontinuity and lack of growth in the Nigerian steel industry. The author connects the nexus between political decision and failure of Nigerian industries on one

hand, and the failure of the Western proposed policy of liberalization (privatisation) on the other. Attah revealed that concession of the Ajaokuta Steel Company to private companies (other than Tiajpromexport which was the original contractual company) led to the steel company being pilfered rather than invested on. Attah demonstrated that the concession led to the deterioration of the company and none payment of workers for a long stretch of time. Indeed, the author argued that Western capitalist interests are not concerned with Nigeria’s industrialization through the development of her own steel industry, which will, in turn, curb Nigeria’s import of steel from those countries. Companies such as SOLGAS (America), Kobe Steel (Japan) and GIHL (India) that were concessionaires in the steel  company, did not only fail   to inject the needed capital for   the turnaround development of the company for production, they further deepened the crisis of the company by removing critical  spare parts from the company for use in other places. The article is thus important to the present study as it helps to understand the role of governmental decisions especially on concession and how it has affected the Ajaokuta Steel Company. The article equally creates a basis for comparing the involvement of other countries in the Ajaokuta steel company and that of Russia.

Oyeyinka O.O. and Adeleye O. in “Technological change and Project Execution in a Developing Economy: Evolution of Ajaokuta Steel Plant in Nigeria”45highlighted the plans made and agreements reached with regard to the construction and subsequent operations of the Ajaokuta Steel Company. The authors reviewed these agreements and reached the conclusion that the agreements reached for the construction of the Ajaokuta steel Company had implication for technology transfer. They argued that several governmental interferences in terms of appointment to technical areas had implications for the smooth functioning of the company. They pointed out that even the choice of locating the company is questionable, arguing that it is a political compromise aimed at depriving the Eastern part of Nigeria such sensitive project and not borne out of technical realities. The article is useful to this research

as it adds evidence to the purpose of this research. However, the paper did not cover the concessions  of  the  steel  company,  which  had  tremendous  consequences  as  the  present research will reveal.

Tenuche M.S. in “Foreign Direct Investments, Strategic Assistance and Sustainable Development: A Critique of International Investment in Nigeria’s Steel Sector”46  examined the implication of Foreign Direct Investments (FDI) in Nigerian steel industry. Tenuche noted that FDIs have been identified as a major stimulus for developing economies like that of Nigeria; however, she noted that there are indications that it may have negative impacts on these economies, corruption, unethical behaviour and environmental degradation fostered by Multi-National  Corporations  (MNCs).  Tenuche  noted  that  through  the  activities  of  the MNCs, sovereignty over policy-making investments are lost, and the direct control ofthe management of programmes into which investments are falls under the dictate of foreign capitals. Tenuche particularly demonstrated that investment in Nigeria’s steel industry has only led to stagnation. She revealed that with regards to Ajaokuta Steel Company, SOLGAS intervention through an agreement reached on 30thJune 2003 demonstrates the interest of international capital to exercise exclusive control over their areas of interests. She noted the imbalance reached in the agreement which she pointed out favoured the American company SOLGAS.

Tenuche equally examined another such agreement reached with Global Holdings on

13thAugust 2004 and reached the conclusion that the agreements have exploitative implications for Nigerian development. She argued that the agreements have the implication of denying the Nigerian populace the benefits derivable from the development of a viable steel industry. She particularly opined that if the agreements were implemented, it would have defeated the hope of employment generation, since the companies had control over staffing, as they often hire expatriates. Also, she noted the agreements had implications for

technological transfer and the long run repatriation of profits without hindrance. Although the agreements did not succeed, it is important to note that these concessions had complicated the prospects of completing the Ajaokuta Steel Company as the present research will point out.

Ifamose F.O. Industrial Policy Implementation in Nigeria: A Case Study of the Ajaokuta Iron and Steel Complex, 1958-200447historically examined technological policies and the Nigeria steel industry, the nature, characteristics and the various policies as well as institutional support for their implementations since independence, Ifamose noted that technology is central to any development strategy adopted by a nation as it provides the goods and services needed for survival and growth of an economy. Thus, she affirmed that the weakness or strength of a modern nation is hinged on the basis of her technological capability. She noted that three methods of technological acquisition can be adopted: first, by self-developing: this is by discovering relevant knowledge consciously and/or unconsciously, and inventing the necessary tools and machines through Research or Development (RD) and even by chance; second, by copying, learning, technological transfer, stealing from countries that already possess relevant knowledge; and third, by combination of the first and second ways.

Ifamose particularly discussed the Nigerian steel industry and revealed the techno- economic considerations in setting up a steel industry. She opined that the availability of raw materials, choice of location, market availability, structure and government intervention are all necessary factors in establishing a steel plant. She, however, noted that political consideration became the most important factor in setting up the Nigeria steel industries. She reviewed the progress of the Nigeria steel industry and concluded that lack of raw materials, importation of necessary inputs, lack of power supply and lack of replacement capacity for major equipment among others were the major challenges of the steel industry. This resonates

with other literature so far discussed, thus giving a sound perspective to the problems of

Ajaokuta steel company.

Paul   Obi-Ani   in   the   book   titled   ShehuShagari’s   Presidency   1979-1983:   An Appraisal48 critically examined the role of Shagari’s regime in the development of Ajaokuta steel   company.   He   described   the   importance   the   administration   attached   to   the industrialization of Nigeria, which culminated in the construction of Ajaokuta Steel Company from 1981. Obi-Ani noted that beyond economic reasons, the Shagari regime recognized the strategic importance of steel development.

Describing Ajaokuta Steel Company, Obi-Ani said: “…the ASC has been a case of misplaced priority…”. This is because of the huge foreign exchange that has been expended on the project without commensurate productivity. He noted that the project was not founded on productive reality but for “prestige”, arguing that the lack of adequate raw materials and over-reliance on technology transfer leading to dependence were the major challenges of the company. Obi-Ani’s work is a critical view of the Nigeria steel industry, it is relevant to the present study; although the work was a cursory view of the Ajaokuta Steel Company, there is a need to deeply interrogate these challenges he highlighted above.

Agbu O. “The  Iron and  Steel  Industry and  Nigeria’s  Industrialization:  Exploring Cooperation with Japan”49 argued that the importance of iron and steel technology cannot be overemphasized. He demonstrated how advanced countries of the world such as Japan, Germany and the USA, among others applied to iron and steel technology to develop their industrial base. He lamented that despite the fact that African coal fostered industrial development elsewhere; the discovery of iron ore for making steel has not been properly harnessed in Africa. He pointed to the poor development and application of technology for societal uses and for industrial production as being the most important factor  inhibiting developmental efforts in Africa. He pointed to two main reasons behind this, namely, lack of

political will among African leaders and lack of technological transfer from technologically advanced countries who he argued are protectionist in their actions. Therefore, he argued that there is a need for cooperation between industrialized countries and developing countries in Africa in the area of developing basic industries. He specifically argued for cooperation between Nigeria and Japan in Nigeria’s steel industry. The study is very critical to the present research as it recognizes the critical importance of cooperation in developing Nigeria’s steel industry.  However,  the  author  did  not  recognize  the  negative  impact  of  Kobe  Steel,  a Japanese company that was given the concession to rehabilitate the Ajaokuta Steel Company, a factor that has contributed to the recession of steel development in Nigeria, as this study will point out.

In conclusion, these literature are critical to understanding the factors that led to Nigeria’s drive for industrialization through the development of her steel industry. They revealed the ideological and realistic reasons behind Nigeria’s drive to cooperate with other countries to uplift her steel industry. However, the literature did not critically assess the role of Russia in the development of the Ajaokuta steel company. More so, critical issues relating to the Ajaokuta steel such as the technical and financial roles Russia played, and factors that led to the recession and concession of the company as well as the effectiveness of those concessions   are   not   properly   explained.   The   present   study   thus   contributesto   the understanding of the Nigeria steel industry, the outcome of cooperation with Russia and recommends the way forward to policymakers as they seek alternatives to Nigeria’s mono- economy through the steel industry.

Notes

1R.S. Bight, and M.P.N., Namboodripad, “Iron and Steel Industry”, in Singh V.B. (ed.) Economic History of India: I857-1956, New Delhi: Allied Publishers Pvt. Ltd., (1975), pp. 201-222, (208)

2 Bight, and Namboodripad, “Iron and Steel p.201

3N.E., Attah “Ajaokuta Steel Company of Nigeria and concession: Counting the Human Cost 2003-2010” African Journal of Economic and Sustainable Development Vol. 2, No. 2,(2013) pp. 157-131

4O. Agbu “The Iron and Steel Industry and Nigeria’s Industrialization: Exploring Cooperation with Japan” Institute of Developing Economies, Japan: VRF Series, No.418 (March 2007) p.1, 4

5R.J. Gavin and W. Oyemakinde “Economic Development Since 1800” in Obaro Ikime (ed.) Groundwork of Nigeria History, Ibadan: Heinemann Educational Books (1980) pp. 482-517

6O.N Njoku Economic History of Nigeria 19th  and 21st  Century, Enugu: Magnet

Business Enterprises (2014) p.236

7Agbu “The Iron and Steel” p.4

8Paul,  Obi-Ani  Shehu  Shagari’s  Presidency  1979-1983:  An  Appraisal  Makurdi: Aboki Publishers, (2010) p.79-83

9R. Bamidele “Nigeria’s Industrial Policies, Sustainable Development and the Challenges of Globalization” Paper presented at the 21st Annual Nigerian Anthropological and Sociological Practitioners Association (NASA) Conference., (Nov.2016)At Kaduna State University, Kaduna, Nigeria, https://www.researchgate.net/publication/311451163Obi-Ani, Shagari’s Presidency… p.63

10Obi-Ani Shehu Shagari… p.63

11D. Kamarka, Impact of Economic Liberalization on the Indian Steel Industry A PhD Thesis submitted to the Department of Economics, The University of Burdwan, West Bengal India, (2007) p. 20 <http://hdl.handle.net/10603/63328> Accessed 05-07-2016

12Kamarka, Indian Steel Industry p.22

13Agbu “The Iron and Steel” p.7

14World       Steel       Association       “Crude       steel       production,       1980-2014”

<www.worldsteel.org/en/dam/jcr:f91b52c8-fa72-4edd-9e45- f510856f0e66/steel+annually+1980-2014.pdf> Accessed 05-07-2016

15 W. W. Rostow “The Stages of Economic Growth” The Economic History Review, New Series, Vol. 12, No. 1 (1959), pp. 1-16 http://www.jstor.org/stable/2591077 Accessed:

16/11/2017; J. Matunhu, “A Critique of Modernization and Dependency Theories in Africa:

Critical Assessment” African Journal of History and Culture Vol. 3(5), (June 2011) pp. 65-

72,

16Matunhu, “A Critique” p.66

17Matunhu, “A Critique” p.66

18E.A.  Brett,  Colonialism  and  Underdevelopment  in  East  Africa:  The  Politics  of

Economic Change 1919-1939 New York: NOK Publishers, (1973), p.vii

19Brett, Colonialism… p. 15

20Brett, Colonialism… p. 15

21World   Steel   Association   “Crude  steel   production,   1980-2014”   World   Steel

Association                  “Crude                  steel                  production,                  1980-2014”

<www.worldsteel.org/en/dam/jcr:f91b52c8-fa72-4edd-9e45- f510856f0e66/steel+annually+1980-2014.pdf> Accessed 7-09-2016

22Matunhu, “A Critique” p.66

23Agbu “The Iron and Steel” p.7

24Attah “Ajaokuta Steel Company”    p.159; M.S. Tenuche “Foreign Direct Investments,  Strategic Assists  and  Sustainable Development:  A Critique of International Investment in Nigeria’s Steel Sector” Journal of Politics and Law Vol. 3, No. (September

2010) pp. 139-147

25Matunhu, “A Critique” p.70

26G. Hyden “Changing Ideological and Theoretical Perspectives on Development” in U. Himmelstrand, K. Kiyanjui and E. Mburugu (eds.) African Perspectives on Development London: James Currey Ltd (1994) pp.308-319

27S. Osvaldo, “National Development Policy and External Dependence in Latin America,”cited in Vincent Ferraro, “Dependency Theory: An Introduction,” in Giorgio Secondi (ed.) The Development Economics Reader, London: Routledge, (2008), pp. 58-64; Theotonio Dos Santos, “The Structure of Dependence,”   cited in Vincent Ferraro, “Dependency  Theory:  An  Introduction,”  in  Giorgio  Secondi  (ed.)  The  Development Economics Reader, London: Routledge, (2008), pp. 58-64;

28Gabrielyan Akop  “Development,  Globalisation  and  the  Dependency  Theory  in

South Caucasia”World Affairs: The Journal of International Issues Volume: 19, Issue : 3  (

2015)108-117

29Matunhu, “A Critique” p.70

30Akop “Development, Globalisation and the Dependency Theory…” p.109

31Akop “Development, Globalisation and the Dependency Theory…” p.109

32J. Rapley Understanding Developments: Theory and Practice in the Third World,

3rd Edition Boulder: Lynne Rienner Publishers (2007) p.1

33Rapley Understanding Development… p.1

34M.P. Sodaro and S.C.  Smith  Economic Development (11thed). Boston: Addison

Wesley (2012) p. 40

35Sodaro and Smith Economic Development p.40

36K. Faluyi,  “Industrialization  under  Colonial  Rule”  in  G.O.  Ogunremi  and  E.K. Faluyi (eds.) An Economic History of West Africa Since 1780,Apapa: First Academic Publishers (1996) pp. 211-220

37Faluyi, “Industrialization under Colonial Rule…” p.213

38F. Ugbor “Twenty Five Years of Industrial Growth in Nigeria” in U. Eleazu (ed.)

Nigeria: The First 25 Years, Lagos: Infodata Limited (1988) pp. 117-127

39E. I. Ohimain “The Challenge of Domestic Iron and Steel Production in Nigeria”

Greener Journal of Business and Management Studies Vol. 3 (5), (July 2013) pp. 231-240,

40A.O. Nwani, “Technical and Scientific Co-operation between Nigeria and Eastern European Countries” in A.B. Akinyemi (ed.) Economic Cooperation between Nigeria and Eastern Europe Lagos: Macmillan Nigeria (1984) pp. 92-100

41G. Kuznetsov “Economic Cooperation between Nigeria and the USSR” in A.B. Akinyemi (ed.) Economic Cooperation between Nigeria and Eastern Europe Lagos: Macmillan Nigeria (1984) pp. 128-130

42G. Kuznetsov “Technical Cooperation Involving Training of National Personnel between Nigeria and the USSR” in A.B. Akinyemi (ed.) Economic Cooperation between Nigeria and Eastern Europe Lagos: Macmillan Nigeria (1984) pp. 128-130

43J.A. Ajayi, M. Adegbite and R.I.A. Iyanda.“Sustainable Iron and Steel Production in Nigeria: The Techno-Economic Backbone of the National Development” A Paper Presented at WECSI 2014 Technical Proceedings on MDGs& Post 2015 Challenges (5 Wed., Nov.

2014)              <http://www.wfeo.org/wp-content/uploads/wecsi2014/B1/B1-1.MAINPAPER- Steel_for_Sustainable_Development-AdeAjayi.pdf> assessed 26/9/2016

44N.E., Attah “Ajaokuta Steel Company of Nigeria and concession: Counting the Human Cost 2003-2010” African Journal of Economic and Sustainable Development Vol. 2, No. 2, (2013) pp. 157-131

45O., Oyeyinka and O., Adeloye “Technological Change and Project Execution in a Developing Economy: Evolution of Ajaokuta Steel Plant in Nigeria” A Report Submitted to IDRC Communications Division Canada. (April 1988)

46M.S. Tenuche “Foreign Direct Investments, Strategic Assists and Sustainable Development: A Critique of International Investment in Nigeria’s Steel Sector” Journal of Politics and Law Vol. 3, No. (September 2010) pp. 139-147

47F.O. Ifamose Industrial Policy Implementation in Nigeria: A Case Study of the Ajaokuta Iron and Steel Complex, 1958-2005 an Unpublished PhD Thesis Submitted to the University of Ilorin (2005)

48Paul,  Obi-Ani  Shehu  Shagari’s  Presidency  1979-1983:  An  Appraisal  Makurdi: Aboki Publishers, (2010) 49O. Agbu “The Iron and Steel Industry and Nigeria’s Industrialization: Exploring Cooperation with Japan” Institute of Developing Economies, Japan: VRF Series, No.418 (March 2007)

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