RESOLVING THE AJAOKUTA CONUNDRUM
It’s time to wind up the drainpipe
Despite setting set aside the sum of N12.18 million in the 2026 budget for a ‘Continuous National Survey on 7,841 Moribund Industries in Nigeria’, the federal government has also proposed to spend N6.04 billion on personnel costs for workers of the Ajaokuta Steel Company Limited in the 2026 budget. Yet more than half a century after it was conceived as a critical tool to the country’s industrialisation aspiration, the Ajaokuta Steel Mill remains an unproductive drainpipe. The recent heated exchange between the Minister of Steel Development, Shuaibu Audu and Senator Natasha Akpoti-Uduaghan during the joint budget defence session of the National Assembly merely symbolised the frustrations of Nigerians. Such is the disappointment that for the past four decades, debates have largely centred around whether the edifice, said to be ‘almost completed’, should be concessioned or sold as scrap.
With billions of Naira being expended to pay thousands of redundant workers, it is important that an amicable solution be found to what has since become a metaphor for waste, and broken dreams. That every administration has had to waste enormous resources on what has become a huge cost centre is a sad commentary for a project that was said to have been 84 per cent completed as far back as 1983, and on which between $8 billion and $11 billion had been spent, depending on whose figures are being quoted. We are concerned by the proclivity to the waste of scarce resources that Ajaokuta represents. We support the idea of concessioning it without having to invest any further public resources on the steel mill.
Although we have heard the usual promises lately, the unfortunate thing about Ajaokuta Steel Company is that nobody knows what to believe anymore. In 2014, the Director of Steel and Non-ferrous Metals Department, Ministry of Mines and Steel Development, said the federal government had spent about $6 billion on the plant, and that only $513 million was needed for completion. The estimates were said to have come from the report of a technical committee. Same year, another committee said it would require $1.2 billion for the steel complex to come on stream.
In December 2022, the late President Muhammadu Buhari said the federal government had begun the concession process by first rescuing it from “legal disabilities.” He stated that the process had cost the federal government over $400 million, adding that after the ‘legal rescue’, the government was looking for a private investor with the “right profile.” At the end, despite settling for the concession option and going ahead to appoint a transaction adviser, nothing came out of the investments. That perhaps explains why when the Managing Director/Chief Executive Officer, Abdulsalam Naeem, promised last year that the steel company will work under the current administration, not many people took him seriously.
In fact, more than two years after the Minister promised a three-year road map to resuscitate the moribund steel company, there is nothing to suggest any action has been taken. “We are looking at where different aspects can be handled by different people with different core competencies,” Audu said at the time, while touting figures like his predecessors. “What we plan to do is to start the Light Steel Mill or the LSM section, which will cost us about N35 billion to be able to produce 50,000 metric pounds of iron rods.” This is music to the ears, but we are yet to see how the federal government will give practical expression to this promise.
We urge the federal government to take a definitive position on the Ajaokuta Steel Company Limited. We cannot continue to commit scarce resources to fund what has become a monument to waste.
