Economists and financial experts have expressed concerns over the the N29 billion reportedly spent on personnel costs at the moribund Ajaokuta Steel Company Limited in the last few years.
Reports say that the official domain of the Budget Office of the Federation revealed that a total of N29 billion Naira was spent on personnel costs only as collated from the appropriation bill from 2016 to 2023.
The report has raised concern among those knowledgeable about the firm’s running. This is because some of them noted that the idleness of the complex is caused by interference and lackadaisical attitudes.
On his part, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said bureaucracy, political interference, and corruption were vital issues affecting the success of the Ajaokuta plant.
Also, an economist and a senior lecturer of economics at the Pan Atlantic University, Dr Olalekan Aworinde, who established that he is well informed of the firm’s running, described the company as a waste of government resources as it was currently inactive.
He, however, said that the company had the potential to significantly drive down unemployment, improve economic growth and boost the country’s foreign reserves.
An economist and accountant, also a former Chairman of the Manufacturers Association of Nigeria Export Group, Ede Dafinone, called for 100 percent privatization of the plant rather than the proposed concession.
Economists and financial experts raised the concern after records showed how much the steel company has gulped despite its idle state under the current administration of President Muhammadu Buhari.
The incumbent government allocated over N3bn years ago to cover personnel costs at the Ajaokuta Steel Company each year.
Records available in the public domain showed that between 2016 and 2023, a total of N29.35bn was gulped to cover personnel costs for the Ajaokuta Steel Complex.
In 2016, the Federal Government budgeted N3.55bn for personnel costs, which was 90.79 percent of N3.91bn total expenditure budget of the steel plant. By 2017, personnel cost allocation was N3.84bn, which was 89.92 percent of the total allocation of N4.27bn.
The sum of N3.76bn was allocated to cover personnel costs at Ajaokuta Steel Plant in 2018. This was 89.74 percent of the total expenditure budget of N4.19bn.
A breakdown of the report revealed that the funds were budgeted for specific projects such as the maintenance of power facilities for N106.3m, construction /provision of water facilities for N196.5m, lighting and security of the Ajaokuta steel plant at N10m, and purchase of a 30-seater bus at N413m.
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