The Federal Government of Nigeria has reacquired Ajaokuta Steel Company, after settling Global Steel Holding Limited (GSHL), the sum of $496 million.
Reports show that the Ajaokuta Steel Company was sold to GSHL under former President Olusegun Obasanjo’s government, through his vice, Atiku Abubakar, for a meager price, leading to a situation where 120,000 workers lost their jobs.
And with the full settlement of the amount with which the Indian company bought it, the Steel Company is fully back in the hands of Nigeria.
The settlement of the money to the GSHL, according to the government sources, is in fulfillment of the promise on September 3, 2022 that the contract with the Indian company would be terminated as soon as possible.
Ajaokuta steel company was built by the Soviets between 1979 and the mid-1990s but has never produced steel as the project was never completed.
The Attorney-General and Minister of Justice, Abubakar Malami confirmed that the federal government has paid the company the sum of $496 million to resolve the dispute arising from the $5.258 billion which the corporation requested
He had said that the agreement to settle the Indian company was achieved inside the International Chamber of Commerce’s alternative dispute settlement framework.
The dispute, according to reports, followed the federal government’s revocation in 2008 of an agreement that handed control of the steelworks and the National Iron Ore Mining Company to GSHL.
In canceling the deal, the Umar Yarádua administration said the terms of the concession at the time were not favourable to the country.
The government said, five contracts signed between 1999 and 2007 that gave one firm group, Global Steel group, total control over the Nigerian steel market were the origin of the problems.
According to the justice ministry, a new administration in 2008 decided to terminate the contracts defying legal counsel from the Federal Ministry of Justice, which noted the termination cost in the form of damages