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Socialist Democracy November 2004

By Demola Yaya

As it obtains in every vital sector of the Nigerian economy, the iron and steel sector, the cornerstone of industrial development of any civilized society, is in the terrible state of neglect. Demola Yaya of Socialist Democracy, summarises below the picture of the historic decay of the sector as painted by Didi Adodo, the general secretary, Iron and Steel and Senior Staff Association (ISSSAN) and K. Kadiri, general secretary, Steel and Engineering Workers Union of Nigeria, (SEWUN). He spoke with the two unions’ leaders on the state of the steel sector and also offers the socialist alternative to the crisis in the sector.

Iron and Steel sector is the bedrock of any industrial development. In fact, the development of any nation is determined by the amount of iron and steel produced and consumed. For instance, the amount of steel produced and consumed contributed to the Asian Tigers becoming medium power.

The vision of the initiators to building an articulate iron and steel sector starting from raw material agency where it is sourced to the research institute in Jos where researches take place and where iron ore comes from and Metallurgical Training Institute in Onitsha for manpower development and the end users of this product Ajaokuta Steel Company; Delta Steel Company; Katsina Steel Rolling Company Mill; Jos Steel Rolling Company and Oshogbo Steel Rolling Company was absolutely progressive. There is also machine tools production industry. These companies are interwoven such that if one is knockout, others will be disconnected.

However, Ajaokuta has been under construction for close to 25 years and for the last 15 years now, no money has been put there to complete it. This is a company that is 98% ready. So, the plant has been idled with engineers putting little operation for some 3 months or so. All engineers trained abroad to produce steel in the company will be qualified for compulsory retirement in the next 5 years without producing steel! In the next 5 years therefore, the sector will be grounded to a halt.

Delta Steel Company is a take-away project constructed by Australians and handed over to Nigerians. Its engineers were also trained in Australia with some locally trained here. The company ran up to about 35% capacity utilization 18 years ago and since then, it was running in an epileptic manner until about 8 years ago when everything grounded into a halt. This is a modern, integrated plant designed to produce 960,000 tones of billets castable from one million metric tones of liquid steel. Apart from its billet plant, which is expected to feed the inland Rolling Mills, it also produces a modest range of steel products.

More importantly, the sector is a mega source of employment. In the up steam, about 50,000 Nigerians will be employed. The down stream will employ about 30,000. If Ajaokuta is producing, one of its by-products is electricity that can be sold to NEPA. The Russians, who built it, are available and willing to increase the electricity generating existing capability from 110MW to 1,800MW about 62% of the national generating ability as the existing combined national generating ability of Kainji, Egbin and co is only 2,900MW.

The air separation plant of Delta Steel Company is probably the largest in West Africa and one of the very few that packages Argon Gas. DSC's foundry is a gigantic multi-purpose complex that can turn out clutch plates, brake drums and sprockets for the automobile industry. Conservative estimates show that Delta Steel alone could realise between four to five billion naira yearly on direct sales of primary and auxiliary products. In 1995 and at a pitiful average production capacity of 12%, the value of its billet sales was N910.9million. As at 1993, it was estimated that DSC could generate N1, 113 billion if its production capacity stabilized at 35%. In addition, slag impurities from Delta Steel serve as the best materials for cement making. Argon, which its packages are also indispensable in the production of electric lamp while burnt and hydrated lime are used for water treatment and fertilizer production.

Despite the immense potential of the sector to the Nigerian economy, the Obasanjo government, in line with its neo-liberal policies of privatisation and commercialisation, has concluded arrangement to privatise the sector. About 3 years ago however, government gave a contract to VAIS at the cost of $100 million to rehabilitate the company. It thereafter reached an agreement with VAIS of Australia and Osaka Steel of a joint running of the company. Federal government was to provide $45 million, VAIS was to provide $55 million and Osaka to provide $40 million fund to run it. Federal government paid its own part while Osaka and VAIS squandered it and the plant that was supposed to be rehabilitated is vandalized as at of now!

Any serious government interested in development of its country should know that the sector is too strategic to be left in private hands, local or foreign; that it is crucial to it national development in many ways, including the enhancement of the country's defence, industrial self-sufficiency, given the steel sector's role as a catalyst armament development. No serious country leaves such a national security priority and direction of its technological advancement to foreign and incapable private hands.

Obasanjo's government however has been making frantic effort to privatise this sector and every protest by workers in the sector via their unions (Steel and Engineering Workers' Union of Nigeria- SEWUN and Iron and Steel Senior Staff Association of Nigeria (ISSSAN) to the National Assembly has yielded no positive fruit. as the government still insists on privatizing most companies in the sector. In fact it has finally abandoned financing the sector as reflected in the current budget proposal, which has no the sector included.

As a result of all these surmountable difficulties and its resolves to privatise this sector For instance, workers are being owed 16-18 month salary areas. They are placed on half salary. From May 2004, the government and employers have unilaterally reduced salaries and emoluments of workers in the sector. Workers are being paid on percentage basis and government has not provided any reasonable justification for it.

The workers have therefore resolved to embark on indefinite strike from November 8, 2004 to demand the immediate payment of salaries and draw the government's attention to a long time issue of total neglect of the sector with demand for adequate funding of the sector.

DSM fully supports the proposed strike of the workers to demand for the aforementioned especially the campaign against privatisation of the sector. The workers should use the strike to make a statement on the state of the sector. It should be used to campaign against the privatisation of the sector and for adequate funding of the sector. The strike is limited to the public sector, which is ordinarily under-utilized in spite of its enormous potential and whose workers are made to work below capacity by deliberate government policy. Thus, to make the strike much effective, it would be better for the workers of private sector of the industry to join the strike in solidarity. More so, the workers should not be made to just stay home during the strike, there should be series of political activities that include symposia and where and when necessary peaceful protest and demonstration. In course of this the labour in general and the public should be called upon for solidarity.

Government irresponsibility and its neo-liberal policies have been the major problem that the sector is confronted with and this has retarded development and made life miserable for majority of the people. The sector started dying since Babangida's SAP regime.

The only way forward for the sector and the country is to have a government with socialist programme that will not embrace these imperialist IMF/World Bank policies of privatisation, deregulation, commercialisation, etc. but committed to fund the sector and use its products for development of our country with a democratic planning and decision-making in the management system to include elected representatives of workers who know what is needed for maximum production, workers requirements and needs. Anything short of this is an everlasting disaster.

By Demola Yaya

As it obtains in every vital sector of the Nigerian economy, the iron and steel sector, the cornerstone of industrial development of any civilized society, is in the terrible state of neglect. Demola Yaya of Socialist Democracy, summarises below the picture of the historic decay of the sector as painted by Didi Adodo, the general secretary, Iron and Steel and Senior Staff Association (ISSSAN) and K. Kadiri, general secretary, Steel and Engineering Workers Union of Nigeria, (SEWUN). He spoke with the two unions’ leaders on the state of the steel sector and also offers the socialist alternative to the crisis in the sector.

Iron and Steel sector is the bedrock of any industrial development. In fact, the development of any nation is determined by the amount of iron and steel produced and consumed. For instance, the amount of steel produced and consumed contributed to the Asian Tigers becoming medium power.

The vision of the initiators to building an articulate iron and steel sector starting from raw material agency where it is sourced to the research institute in Jos where researches take place and where iron ore comes from and Metallurgical Training Institute in Onitsha for manpower development and the end users of this product Ajaokuta Steel Company; Delta Steel Company; Katsina Steel Rolling Company Mill; Jos Steel Rolling Company and Oshogbo Steel Rolling Company was absolutely progressive. There is also machine tools production industry. These companies are interwoven such that if one is knockout, others will be disconnected.

However, Ajaokuta has been under construction for close to 25 years and for the last 15 years now, no money has been put there to complete it. This is a company that is 98% ready. So, the plant has been idled with engineers putting little operation for some 3 months or so. All engineers trained abroad to produce steel in the company will be qualified for compulsory retirement in the next 5 years without producing steel! In the next 5 years therefore, the sector will be grounded to a halt.

Delta Steel Company is a take-away project constructed by Australians and handed over to Nigerians. Its engineers were also trained in Australia with some locally trained here. The company ran up to about 35% capacity utilization 18 years ago and since then, it was running in an epileptic manner until about 8 years ago when everything grounded into a halt. This is a modern, integrated plant designed to produce 960,000 tones of billets castable from one million metric tones of liquid steel. Apart from its billet plant, which is expected to feed the inland Rolling Mills, it also produces a modest range of steel products.

More importantly, the sector is a mega source of employment. In the up steam, about 50,000 Nigerians will be employed. The down stream will employ about 30,000. If Ajaokuta is producing, one of its by-products is electricity that can be sold to NEPA. The Russians, who built it, are available and willing to increase the electricity generating existing capability from 110MW to 1,800MW about 62% of the national generating ability as the existing combined national generating ability of Kainji, Egbin and co is only 2,900MW.

The air separation plant of Delta Steel Company is probably the largest in West Africa and one of the very few that packages Argon Gas. DSC's foundry is a gigantic multi-purpose complex that can turn out clutch plates, brake drums and sprockets for the automobile industry. Conservative estimates show that Delta Steel alone could realise between four to five billion naira yearly on direct sales of primary and auxiliary products. In 1995 and at a pitiful average production capacity of 12%, the value of its billet sales was N910.9million. As at 1993, it was estimated that DSC could generate N1, 113 billion if its production capacity stabilized at 35%. In addition, slag impurities from Delta Steel serve as the best materials for cement making. Argon, which its packages are also indispensable in the production of electric lamp while burnt and hydrated lime are used for water treatment and fertilizer production.

Despite the immense potential of the sector to the Nigerian economy, the Obasanjo government, in line with its neo-liberal policies of privatisation and commercialisation, has concluded arrangement to privatise the sector. About 3 years ago however, government gave a contract to VAIS at the cost of $100 million to rehabilitate the company. It thereafter reached an agreement with VAIS of Australia and Osaka Steel of a joint running of the company. Federal government was to provide $45 million, VAIS was to provide $55 million and Osaka to provide $40 million fund to run it. Federal government paid its own part while Osaka and VAIS squandered it and the plant that was supposed to be rehabilitated is vandalized as at of now!

Any serious government interested in development of its country should know that the sector is too strategic to be left in private hands, local or foreign; that it is crucial to it national development in many ways, including the enhancement of the country's defence, industrial self-sufficiency, given the steel sector's role as a catalyst armament development. No serious country leaves such a national security priority and direction of its technological advancement to foreign and incapable private hands.

Obasanjo's government however has been making frantic effort to privatise this sector and every protest by workers in the sector via their unions (Steel and Engineering Workers' Union of Nigeria- SEWUN and Iron and Steel Senior Staff Association of Nigeria (ISSSAN) to the National Assembly has yielded no positive fruit. as the government still insists on privatizing most companies in the sector. In fact it has finally abandoned financing the sector as reflected in the current budget proposal, which has no the sector included.

As a result of all these surmountable difficulties and its resolves to privatise this sector For instance, workers are being owed 16-18 month salary areas. They are placed on half salary. From May 2004, the government and employers have unilaterally reduced salaries and emoluments of workers in the sector. Workers are being paid on percentage basis and government has not provided any reasonable justification for it.

The workers have therefore resolved to embark on indefinite strike from November 8, 2004 to demand the immediate payment of salaries and draw the government's attention to a long time issue of total neglect of the sector with demand for adequate funding of the sector.

DSM fully supports the proposed strike of the workers to demand for the aforementioned especially the campaign against privatisation of the sector. The workers should use the strike to make a statement on the state of the sector. It should be used to campaign against the privatisation of the sector and for adequate funding of the sector. The strike is limited to the public sector, which is ordinarily under-utilized in spite of its enormous potential and whose workers are made to work below capacity by deliberate government policy. Thus, to make the strike much effective, it would be better for the workers of private sector of the industry to join the strike in solidarity. More so, the workers should not be made to just stay home during the strike, there should be series of political activities that include symposia and where and when necessary peaceful protest and demonstration. In course of this the labour in general and the public should be called upon for solidarity.

Government irresponsibility and its neo-liberal policies have been the major problem that the sector is confronted with and this has retarded development and made life miserable for majority of the people. The sector started dying since Babangida's SAP regime.

The only way forward for the sector and the country is to have a government with socialist programme that will not embrace these imperialist IMF/World Bank policies of privatisation, deregulation, commercialisation, etc. but committed to fund the sector and use its products for development of our country with a democratic planning and decision-making in the management system to include elected representatives of workers who know what is needed for maximum production, workers requirements and needs. Anything short of this is an everlasting disaster.

Socialist Democracy November 2004