Ajaokuta Steel: Nigeria Allocates N6.21bn for Salaries Despite Four Decades of Inactivity
Nigeria’s Federal Government has earmarked N6.21 billion for the salaries of workers at the defunct Ajaokuta Steel Company in the 2025 budget—a sharp increase of 44.76% from the N4.29 billion allocated in 2024. Despite over four decades of unfulfilled promises, the company has yet to produce a single sheet of steel.
Established in 1979, the Ajaokuta Integrated Steel Complex was envisioned as the foundation of Nigeria’s industrialisation, designed to house a metallurgical process plant, engineering facilities, and auxiliary structures. According to its website, the plant was projected to employ 10,000 people in its first phase and stimulate 500,000 jobs in downstream industries nationwide.
Although touted as Nigeria’s industrial backbone, the steel complex has remained inoperative, with mismanagement and political inertia leaving it in limbo despite being 98% complete by 1994. Today, the plant stands as a symbol of unrealised ambition, perpetually absorbing government funds without delivering on its intended economic impact.
Escalating Costs Amidst Stagnation
Between 2014 and 2024, the Federal Government budgeted N38.9 billion for salaries and allowances at Ajaokuta, despite the plant’s dormancy. With the proposed 2025 allocation, the total expenditure on the steel company over 11 years will rise to N45.11 billion.
A breakdown of allocations reveals a consistent rise in personnel costs, from N3.8 billion in 2014 to a projected N6.21 billion in 2025, representing over 91% of the total budget for the plant. Critics argue that this spending lacks justification, as the facility remains devoid of productive activity.
Senator Natasha Akpoti-Uduaghan, representing Kogi Central, recently decried the situation during an investigative hearing, questioning the legitimacy of the workforce. “From several visits I’ve made to the complex, hardly 10 people were sighted to be around or doing anything. So, who are the workers collecting monthly salaries from the appropriated N4.2 billion?” she queried.
Revival Efforts Falter
Over the years, various administrations have made attempts to resuscitate Ajaokuta Steel, including a 2019 agreement between Nigeria and Russia that faltered due to the COVID-19 pandemic. More recently, President Bola Tinubu initiated discussions with China’s Luan Steel Holding Group, but no tangible progress has been reported.
The Federal Government continues to explore options, signing a Memorandum of Understanding (MoU) with a Russian consortium in 2024 to rehabilitate the steel complex and the National Iron Ore Mining Company. However, experts argue that privatisation remains the most viable solution for unlocking the facility’s potential.
Despite these efforts, experts estimate that the steel complex would require between $2 billion and $5 billion to become operational within three years—a sum far exceeding current budgetary commitments.
A National Dilemma
The sustained funding of Ajaokuta Steel without corresponding productivity has drawn widespread criticism, with many questioning the rationale for continued allocations to an idle project. While the government touts the plant’s potential to catalyse industrialisation, its legacy remains one of squandered opportunities and prolonged inefficiency.
The Federal Government’s resolve to revive the facility remains steadfast, but until tangible progress is made, Ajaokuta Steel continues to stand as a costly reminder of Nigeria’s industrial aspirations gone awry.
