The Federal Government of Nigeria has released $250m to Global Steel Holding Limited (GSHL) as part of first tranche of the $496m agreed upon by both parties over the dispute arising from the Ajaokuta steel complex.
A spokesman for Nigeria’s Attorney-General, Umar Gwandu, confirmed to The Africa Report.
Gwandu confirmed that the first settlement of $250m was effected on Thursday 15 September 2022 to GSHL.
The Ajaokuta project, conceived as the springboard of Nigeria’s industrial take-off in 1979, has remained uncompleted ever since.
The steel plant was designed to produce 5.2 million tonnes of various types of steel products and has so far gulped over $8bn, according to official reports. However, it still has not been completed.
The first phase of the Ajaokuta project was built by a Russian firm, Technopromexport (TPE). In 1994, the Russian firm abandoned the project when it was at 98% completion, citing Nigeria’s inability to meet its contractual obligations.
In 2001, Russia made a push to finish the complex but President Olusegun Obasanjo picked American firm, Solgas Energy, in 2004 to complete it instead. The contract was revoked due to non-performance and was subsequently handed to Global Infrastructure Nigeria Limited (GINL), owned by an Indian firm, Global Steel Holdings.
President Umaru Yar’Adua terminated the contract, arguing that the agreements were skewed in favour of the concessionaire. He accused GINL of stripping Nigeria’s assets and ordered that the firm be investigated for corruption.
But GINL sued Nigeria for terminating the contract and this led to a prolonged dispute which eventually culminated in a $496m settlement.
The payment comes as the country continues to face foreign exchange liquidity issues due to a sharp drop in oil revenue occasioned by an opaque petrol subsidy scheme and unprecedented crude oil theft.
Credits: The Africa Report