Ajaokuta Steel Project: Lawmakers Grill Minister Over Fresh Audit, Budget Irregularities

The Joint National Assembly Committee on Steel Development has expressed serious concerns over glaring irregularities within the Ministry of Steel Development’s 2024 budget. During a recent budget defense session, committee members, led by co-chairperson Zainab Gimba, highlighted significant issues, including allocations for vague “capacity-building programs” and “skills training initiatives” with no discernible evidence of execution or impact.

Gimba expressed grave concerns about the potential for these funds to be misappropriated.

“A first-hand appraisal of the 2024 submissions reveals budget infractions, such as funds allocated for programs that lack clear documentation of execution,” Gimba stated.

“Administrative and recurrent costs have escalated significantly without corresponding improvements in ministry activities or outputs, raising serious questions about mismanagement or misallocation of funds.”

The committee members were particularly alarmed by the discovery of several projects, especially those related to the long-awaited completion of the Ajaokuta Steel plant, that appear to have violated the Fiscal Responsibility Act, a cornerstone of financial governance in Nigeria.

Citing breaches of the Public Procurement Act, Gimba pointed to instances of non-competitive bidding processes and inflated contract costs, strongly suggesting a lack of transparency and accountability. “There are ghost projects, a direct violation of Nigeria’s Financial Regulations,” she stressed, emphasizing the need for a thorough and independent forensic audit of all 2024 expenditures and contracts.

Furthermore, the committee expressed deep dissatisfaction with the Ministry’s 2025 budget allocation, where a staggering 57.2% of the total budget is earmarked for personnel costs. This leaves a mere 34.6% for capital expenditure, a woefully inadequate sum for modernizing the critical steel sector.

“Our committee is deeply displeased with the Ministry’s consistent communication failures and lack of sufficient information provided during budget defenses,” Gimba asserted. “If the legislature fails to rigorously scrutinize budgets, government accountability will be severely undermined. We will utilize all our statutory powers to ensure compliance.”

Echoing these concerns, Committee Chairman Patrick Ndubueze emphasized the paramount importance of a robust steel sector for driving Nigeria’s industrial growth. “Nigeria cannot progress without a solid steel industry,” he declared. “We must prioritize capital investments over salaries. Repeating past mistakes is simply unacceptable.”

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A key point of contention during the hearing was the Ministry’s decision to initiate a fresh technical audit of the Ajaokuta Steel plant despite three previous audit reports. Lawmakers expressed skepticism about the necessity of yet another audit, demanding clarity on why the findings of the existing reports had not been implemented.

Minister of Steel Development Abubakar Audu defended the decision, arguing that the previous audits, conducted over a decade ago by different companies, no longer accurately reflected the current realities of the project. He highlighted the recent signing of a Memorandum of Understanding (MoU) with Russia for the plant’s completion, stating that the Russian consortium, in collaboration with Nigerian engineers, would conduct a new technical audit.

“The tripartite MoU was signed in Moscow with Messrs, Tyazhpromexport (TPE), the Russian firm that originally built the Ajaokuta steel plant, and consortium partners,” Audu explained. “The consortium will conduct a fresh technical audit, a report of which will be submitted to the Federal Executive Council (FEC) for approval before work on the plant can commence.”

However, lawmakers remained unconvinced. “You haven’t conducted the technical audit, yet you have already arrived for $2 billion,” questioned Committee member Natasha Akpoti-Uduaghan. “How did you arrive at this figure before completing the audit? We have three existing reports on previous audits carried out on Ajaokuta Steel. Why can’t we implement these existing reports? Why do we always sign new ones?”

In response, Minister Audu acknowledged that the existing audits were conducted over a decade ago and by different entities, stating, “The reports will have to be bankable; we are involved with new partners, separate from those who worked on the existing reports.” He reassured the committee that the government had full confidence in the Russian consortium’s ability to effectively contribute to completing the Ajaokuta Steel plant.

The hearing concluded with the Minister promising to address all the concerns raised by the committee regarding the Ministry’s 2024 budget performance and its projections for 2025. This episode underscores the critical role of legislative oversight in ensuring responsible and transparent government spending, particularly in crucial sectors like steel development, which are vital for Nigeria’s economic growth and industrialization.