From Adesuwa Tsan, Abuja
The Joint National Assembly Committee on Steel Development has queried some ghost projects identified in the 2024 budget report submitted to it by the Ministry of Steel Development.
Co-Chairman of the Committee, Zainab Gimba, who raised the issue on Friday, also cited non-adherence to the Public Procurement Act in the execution of capital projects in the period under review.
Speaking when the Minister of Steel Development, Prince Shuaibu Audu, appeared before it to defend the 2025 budget on Friday, Gimba said a first-hand appraisal of the 2024 submissions shows some budget infractions as funds allocated for unspecified capacity-building programmes and skills training initiatives in the steel sector show no evidence of execution or impact.
“These projects risk being classified as ghost projects designed to divert public funds.
“Administrative and recurrent costs significantly increased in 2024 without proportional increases in ministry activities or outputs, a possible indicator of mismanagement or misallocation of funds
“Also, we identified some legal Infractions such as violations of the Fiscal Responsibility Act.
“The act mandates efficient use of public resources and accountability for project outcomes.
“Several projects, especially related to Ajaokuta Steel, failed to meet these criteria.”
Gimba also highlighted instances of financial irregularities in the budget report, stressing that there were cases where some funds were unaccounted for.
She also disclosed that the ministry did not adhere to the Public Procurement Act based on instances of non-competitive bidding and inflated contract costs recorded in the report.
The Chairman, therefore, informed the minister to take note of the areas queried and make necessary submissions on them to the committee secretariat.
“On this note, we recommend conducting a Forensic Audit. There should be engagement of independent auditors to scrutinise expenditures and contracts for 2024,” she added.
On the 2025 budget proposal, the lawmaker noted that the capital budget was low, while that of personnel was high.
“Looking at the Ministry of Steel Development’s 2025 Executive Budget, we see a high proportion of personnel costs put at 57.2 per cent.
“This suggests that most of the funding is spent on salaries rather than developmental projects, which raises concerns about operational efficiency.
“Capital expenditure, which is 34.6 per cent, is inadequate for a sector like steel development, which requires heavy infrastructure, technology, and modernisation investments to drive industrial growth.
“There is no detailed breakdown to show the strategic focus of these expenditures (feasibility studies, stakeholder engagement, and modernisation.)
“In summary, the Ministry of Steel Development’s 2025 Budget, reflects a commitment to maintaining operations but falls short of delivering the necessary capital investments to transform the steel industry into a viable driver of Nigeria’s industrialization.
“Significant reforms in funding priorities, operational efficiency, and revenue generation are required to align with the ministry’s strategic objectives.
“l will not fail to express the displeasure of our Committee in the way the Ministry has continued to ensure a complete breakdown of communication between us within the period under review.
“It is equally disappointing and unfortunate to recollect how the agencies under the Ministry failed to provide enough information to the Committee during their budget defence.
‘We will not leave any stone unturned in the discharge of our legislative duties.”
On his part, Chairman of the joint panel, Patrick Ndubueze stressed that the committee was dedicated to discharging their legislative duties which is to work for the overall development of steel in the country.
“Our concern is to take Nigeria where it rightfully should be in steel development.
“Nigeria can’t make much progress without a solid steel industry. We have to place emphasis on capital projects, not payment of salaries.
“For us to do well, we can’t be repeating the same mistakes every time. We expected that the ministry would have improved by now.”
In his submission, the minister noted all queries and said the necessary responses will be provided.
Addressing questions by other committee members on the status of Ajaokuta Steel Company in Kogi State, he said the government was still trying to source over $2billion to revive it.
He informed them that the Federal Government signed a Memorandum of Understanding (MoU) with Russia in 2024 for the completion of the plant and the National Iron Ore Mining Company (NIOMCO), also located in Kogi State.
According to him, the tripartite MoU was signed in Moscow with Messrs, Tyazhpromexport (TPE), the Russian firm that originally built the Ajaokuta steel plant and partners of the consortium, Novostal M and Proforce Manufacturing Limited.
Audu said a fresh technical audit will be conducted on the company and the report submitted to the Federal Executive Council (FEC) for approval before work on the plant will begin fully.
On why the partners were brought in, he explained, “$2 billion, about N3.7 trillion is required to revamp Ajaokuta steel. The ministry does not have the money. Our budget for 2024 was just N24 billion, a far cry from that amount. So, we are sourcing for partners.”
When asked by Natasha Akpoti-Uduaghan (Kogi Central) asked why a fresh technical audit was planned when three audit reports from previous exercises could be used and how the $2 billion was arrived at, the minister respond, “The reports will have to be bankable; we are involved with new partners, separate from those who worked on the existing reports.
“The previous audits are about 10 years old. But, we will build on them to come up with what is tenable with present realities.”