Russia, Afreximbank Pledge $1.46bn to Revive Nigerian Steel Giant

Nigeria has said the Russian government and Afreximbank are ready to provide up to $1.46 billion to fund the resuscitation of the troubled Ajaokuta Steel Company, Ameh News reported.

The country’s minister of Mines and Steel Development, Olamilekan Adegbite, who announced the news in Lagos on Tuesday, said a Memorandum of Understanding would be signed by the Nigerian and Russian governments this month for the project.

President Muhammadu Buhari and Russian President Vladimir Putin agreed in October 2019 at the Russia-Africa Summit to pursue the completion of all abandoned projects initiated by both countries, including the Ajaokuta Steel Rolling Mill.

Adegbite told journalists that the plant could be resuscitated “without spending the revenue that we don’t have.”

“So, we agreed with the Russian government. Hopefully, by the end of this month, the MoU will be signed. It was agreed between President Muhammadu Buhari and President Putin that we would complete Ajaokuta on a government-to-government basis. The funding will come from Afreximbank and the Russian Export Centre. Jointly, they will fund the resuscitation of Ajaokuta and the payback will come from Ajaokuta itself. Once Ajaokuta starts operation, experts from Russia will run it; of course, the terms will be agreed,” the minister said.

He added the country had so far invested close to $6 billion in the project.

“If you talk in terms of today’s costs, it will be a lot more than that, and we need to make this investment work,” said Adegbite. According to him, the Ajaokuta plant is 95 to 98 percent complete.

He said the Russian government would complete the project, run it for many years to recoup its investment and then revert it to the Nigerian government.

“We are looking at two and a half years for Nigeria to begin to produce steel and this is a game-changer for Nigeria. It will save us a lot in foreign exchange. Working at full operation, Ajaokuta will employ 10,000 engineers,” Adegbite said.

According to the minister, Afreximbank is bringing $1 billion to the table and the Russian Export Center will participate with $460 million.

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