davidif:


Where has statism ever worked? Please do tell me. When have govts ever been good at running anything? I will be waiting for your response.

davidif:


Well he is also right on that point. Govt has no right getting involved in the free market. There job is to regulate and create an environment where business can flourish not to be getting involved in every industry. This is one of the greatest drivers of corruption in any economic system: state run companies.

Flaghouse1:


Chief
Very good and educative summary of the discourse, my question to you is,would you advice we continue injecting funds into Ajaokuta for now ,if so kindly give cogent reasons so we can put this discourse to rest.
1bottle of Moët for you!!!

Bishopking:


Thank you very much!!! Please pardon my delayed response. I had a very busy week.

Now to the points raised above. To be honest, I do not know the intention of the government about this money being planned to be spent. But as an open-minded person, I will give them the benefit of doubt. The fundamental issue was that Nigerians like to play to the gallery and put the cart before the horse!! We got a lot of things wrong in the quest for technological advancement. Nigeria is a nation of "rent-collectors", to use the words of our own Prof Pat Utomi.

How on earth do we plan to have a steel industry that will be run by foreigners and only transferred to us like a bakery? How we raise highly skilled workforce, Research &Development Centers, system capability and so on should be our priority. In fact, we should have steel development as part of our own military industrial complex among other things. Nothing should be run in isolation. Unfortunately, we have politicians that want to run technical outfits like the MMM guiders run their shows. They just want to collect rent. Or out-rightly steel the money.

So, the concerns raised by the members of this forum are very valid, sadly.

Bishopking:


Thank you very much!!! Please pardon my delayed response. I had a very busy week.

Now to the points raised above. To be honest, I do not know the intention of the government about this money being planned to be spent. But as an open-minded person, I will give them the benefit of doubt. The fundamental issue was that Nigerians like to play to the gallery and put the cart before the horse!! We got a lot of things wrong in the quest for technological advancement. Nigeria is a nation of "rent-collectors", to use the words of our own Prof Pat Utomi.

How on earth do we plan to have a steel industry that will be run by foreigners and only transferred to us like a bakery? How we raise highly skilled workforce, Research &Development Centers, system capability and so on should be our priority. In fact, we should have steel development as part of our own military industrial complex among other things. Nothing should be run in isolation.

Unfortunately, we have politicians that want to run technical outfits like the MMM guiders run their shows. They just want to collect rent. Or out-rightly steel the money.

So, the concerns raised by the members of this forum are very valid, sadly.

shibiyu:


Singapore

Flaghouse1:
P

My snag with this project is that it has been left to lie fallow over a long period of time-successive governments came on board appropriated money to this venture with the sole aim to ensure kick starting of massive off steel production and subsequently provide a means of foreign exchange generation by exporting finished product,All this fund injection never yielded the desired result as the efficient and effective management of the plant over the years was not feasible due to corruption.
Let's. Say this government is sincere in waking up this plant with the N4.3billion appropriation, the technology in use now may be obsolete as that will be a draw back in achieving efficiency of the complex.

My take is that there need to be a holistic overhaul to identify snags in the production process and other socio-political interference that can hinder the optimization of the plant and in same vein put In place control measures to isolate all these problems .

For transparency all these issues should be documented and put in public domain to increase the confidence of the populace on the transparency of the project then the people will believe the appropriation of funds to the plant is not an avenue for fund diversions by the political class.

vodutive:


This is a flawed idealogy based on western peopaganda. To begin with the government is always getting involved in the free maerket...there is no such thing as a free market. The housing crisis was caused by govt intervening in the free market. Tarrifs, duties and outright bans are examples of intervening in the free market. Govt bailout of banks and Insurance companies in bothe the US and The UK tells you don't take everything you read in your economics textbooks literally. Uk govt still owns shares in many banks...why? What are Freddie Mac and Fannie Mae if not govt sponsired corporations...together they account for over 70% of all US mortgages. Yet these are the people preaching free market and we swallow whole. WHy does the US govt have to be the biggest mortgage provider.


Yes there is corruption but you don't throw the baby out with the bath water, Govt needs to (and indeed is the only one who can) establish capital intensive industries. Once established, privatise them but if you are waiting for Nigerians, you#ll wait forever because Nigerians do not have the capacity to do so.

LordAdam7:


The government is not sincere.

According to media reports from the Minister, the government was meant to buy back the plant, and re-sell it to another private company to revamp the plant. There was no mention of the government revamping the plant by themselves.

But out of the blue, the government is pumping money into the plant without dumping the plan of finding an investor to "revamp" the plant.

And by the way, they've already spent N3.8b on this plant in 2016. The N4.3b is for 2017. Noting that there is no mention of what stage of renovation they're at now, it could very well be that we could have to spend another N4b+ in 2018. And for what?

For a plant they're going to sell anyway! To the private sector! In a recession!

Someone is playing a fast one on us. It could very well be that they aren't spending sh*t on the plant, maybe a couple of millions to maintain a show of activity. And when they're done using it as a cash cow, they'll sell it to a company owned by a crony, who'd continue holding in trust for the next administration to use as their cash cow.


It's a cycle of corruption that didn't start with this government, but will certainly last after this government is over.

This is like the Abacha loot. Every successive government uses it to get money, but there is zero accountability on how the funds are expended.

-Lord

davidif:


Well, how well has statism worked in Venezuela and Brazil? How well did Tarriffs work for the U.S in the 30's? How well did U.S govt interference in the late 90's work out? How well did socialism work in Cuba, U.S.S.R, North Korea e.t.c?

How long will it take for African counties to learn from the mistakes of other countries? How long will they learn that socialist and state driven economies mostly end up in failure? African countries and there counterparts in south america and the carribean never seem to learn their lessons that an economy where the state is the biggest drive of the economy is going to fail. This is something that a lot of western countries learnt decades ago and have moved on from meanwhile our African policy makers still seem to be doing the same thing that they did and expecting good results. In the words of Margaret Thatchwer, socialism has ended up in ash heap of history. Socialist/statist economics would always take a back seat to the free market.

Sorry to inform you people but Ajaokuta is dead (not that it even lived in the first place) and all the kings men and the kings horses can never put it together again.

davidif:


Wait what?!??!? You are comparing Nigeria a highly diverse country of approximately 250 etnic groups and one of the largest populations in the world to a city state? Ok, gotcha.

vodutive:


and where did you read me say I am an advocate of socialism of state control? I said governments need to intervene and indeed they do from time to time even in so called free enterprise economies. Government's role is to teleguide the economy, act in emergencies/crises and intervene when the private economy has not got the capacity or profitability to deliver a service or product that is in the national interest.

If you think Nigeria is ever going to industrialize or generate sufficient power with private capital, you are living in dreamland, we are already 60 years into our independence, in 60 years we will be talking asbout the same problems if you are waiting for private capital. Government is the only one with the capacity to establish certain large industries, once established they can and must be privatised. That is what these countries you mention did and that is indeed the lesson you should learn from these countries. The problem is not government setting up industries, the problem is government running them.


Please don't get bogged down with theory and throw the baby out with the bath water, there is a difference between who establishes and who runs. It has been proven all over that governments getting involved in running commercial enterprise has been a failure but that does not mean that governments should not establish critical industries and sell them. A lot of the industries privatized by the Thatcher govt are very profitable organizations today employing loads of people. According to you because they were inefficient under state control, I guess they should never have been established? We live in an environment where access to capital for long gestation businesses is almost impossible, so we should continue exporting raw materials and importing finished goods?


If the British government did not establish or save from collapse at some point in their history, the following companies would not exist: British Petroleum British Aerospace Cable & Wireless Amersham International National Freight Corporation Britoil Associated British Ports, Enterprise Oil Jaguar,British Telecommunications, British Shipbuilders, British Gas, British Airways , Rolls-Royce , BAA, British Steel and about 50 more.

Govt took control becuase it was in the national interest, jobs and national development were at stake and that is what this govt needs to do.


Again I stress the problem is state running of businesses not states establishing industries. I have never said govt should run Ajaokuta or any other state enterprise, I challenge you to quote where I said so. You need to read and respond to what I actually said, not what you think you read because of preconceived ideas.

vodutive:


And what is your alternative oh wise one. To continue importing steel that provides no jobs to Nigerians and eats up or forex?


The obsession with it is that no nation industrializes without steel!

omohayek:

No. It would be better if our private companies bought steel on the international market from the cheapest producers, while we used the little money we have to fix more important things, like our electrical grid and our transport infrastructure. Would you think it better to raise your own cattle and grow your own vegetables, instead of getting a good job that would allow you to buy those things? It's exactly the same reasoning at work here.

davidif:


Bros, they truly need to make Adam Smith's Wealth of Nations required reading in every secondary school in Nigeria cos the lack of understanding of economics is really glaring not only on this thread but in the policies of our central bankers.

Flaghouse1:
[/b]

The bolded refres,we are really in trouble in this country,like I said in my previous post we just don't look at events/scenarios holistically before proffering solution simple secondary school economic laws if applied by our government in formulating policies relating to catalisation of of battered economy will simply do the magic instead of applying all the Harvard,Oxford economic theories which can only work in developed countries in Nigeria.

omohayek:
So they are going to waste another 4.2 billion on this obsolete white elephant of a project, in a world which is already suffering from a glut of cheap Chinese steel? Yet more proof of the utter cluelessness of this government!

Ajaokuta provides a foolproof method for determining whether one is dealing with an economic ignoramus or not: anyone who supports this stupid money-sink can't have the first clue what he or she is talking about.

989900:


The 4.2 is definitely not for resuscitation, the facility is 80% complete and after the just resolved legal drama between Global steel and FGN, the Ukrainians or Chinese are likely to get it. N4.2b can't get the plant to production, we are going into PPP with a foreign company most likely.

LordAdam7:


What is the N4.2b + N3.6b for then? Oga Minister of Steel?

-Lord

davidif:


Guy, in fact i will take it a step further, i wish i could go to the central bank of Nigeria and the Ministry of Finance and give every employee a copy of the book along with the President's economic council along with a copy of the book Atlas Shrugged cos it looks like none of this people understand what they are doing.

Emekamex:


You still dont get it, we cant produce steel if we are not presently mining iron ore. It is just like building a refinery without mining crude oil first.
The basic steps in industrilization should be followed. Govt should invest more in raw materials and then allow the private sector to convert them to finished products.

vodutive:



you are simply showing a lack of understanding of how economies work. Tell me our politicians will steal the money and I won't argue with you but to say that we should import steel when we halready have a steel plant..no matter how ineffficient and there are Nigerians without jobs, the raw material are here and many industries will feed of it is simply ignorant thinking.

989900:


We'll have to wait for Fayemi for further info ( the above I posted was deduced from him likewise).

However, it will be good to note Ajaokuta gulps average N4b annually in salaries and maintenance.

I don't work with assumptions.


P.S. I will attach some screenshots cause I can't post links.

LordAdam7:


So let me get this straight.

We are to wait for further info from the Minister on how they have spent N3.6b and how they intend to spend N4.2b. In a Nigeria where FOI is guaranteed.

Where is the change then?

It means they can bring whatever excuse they can summon for wasting the money and it will fly with folks like you. This is the first time I'm hearing that we have to wait until money has been spent before we know what we used the money for.

For the ports, refineries, roads, and rails, we always know what the money will be used for before it is released...

Why is Ajaokuta Steel a different case?

I'm sick of this double-standardness. If it was in the past, folks like you will be screaming lack of transparency and corruption. Now the eerie silence is shocking.

-Lord

989900:


Asking for accountability is no doubt a good one -- our civil right. And I appreciate the fact we are asking them now.

OTOH, either truthfully or falsely indicated/implemented (I can't hold brief for anyone) if you dig, you will find what the money was/is meant for . . . Like I stated earlier, probably you missed that part, the moribund complex costs this country averagely N4b every year in salaries and maintenance.

989900:


Corruption is our biggest problem. That is why I support concession to the Ukrainians -- they built it. The Indians raped the facility bare, along with our own as collaborators.

omohayek:

Sorry, but you're wrong on the last point. I am personally involved in several of the most cutting-edge technological areas of today, and know at first-hand that none of them require the ability to "machine or make tools". You don't need anything of the sort to write enterprise software, train a neural network, carry out gene editing, or even to design and mask a microchip, and all of these areas are far more profitable than a 19th-century commodity like steel.