Onome Amuge
The federal government has proposed N6.04 billion for personnel costs at the Ajaokuta Steel Company Limited (ASCL) in its 2026 budget, despite the steel plant remaining non-operational more than 45 years after construction began. The total allocation for the complex stands at N6.69 billion, meaning that salaries, wages, and allowances account for more than 90 per cent of the steel plant’s annual funding.
Details from the 2026 Appropriation Bill show that N4.79 billion of the personnel allocation is earmarked for salaries and wages, while N1.25 billion is set aside for allowances and social contributions. This includes N479.42 million for employer pension contributions, N239.71 million for the National Health Insurance Scheme (NHIS), and N59.82 million for employee compensation insurance. Regular allowances alone account for N468.9 million. By contrast, overhead expenditure is limited to N233.63 million, while capital spending stands at N410.8 million.
A year-on-year analysis shows that personnel spending at Ajaokuta has remained disproportionately high compared to capital investments. In 2025, the federal government earmarked N6.21 billion for salaries, up from N4.29 billion in 2024, a 44.76 per cent increase, despite the steel plant producing nothing. While the 2026 personnel allocation is marginally lower than the previous year, it confirms that the company’s core budgetary priority remains staff remuneration rather than the production of steel.
Recurrent expenditure for 2026 totals N6.28 billion, dwarfing the N410.8 million earmarked for capital projects. Less than seven per cent of the allocation is devoted to infrastructure, asset purchases, or rehabilitation. The capital budget includes N56.4 million for fixed asset purchases such as computers and security equipment, N129.2 million for construction and provision of facilities, and N225.2 million for rehabilitation and repairs, largely related to office buildings and electricity supply.
Experts warn that such allocations are insufficient to revive a heavy industrial complex that was originally conceived to anchor Nigeria’s steel and manufacturing value chain. Budget documents further show that ASCL will generate no independent revenue in 2026 and will receive no grants, leaving it entirely reliant on federal appropriations.
Community projects overshadow industrial objectives
Despite the plant’s dormancy, ASCL continues to feature in constituency-style capital projects, including solar street lighting in Niger East and Kwara North, water facilities, road repairs, and grants for market women and youth. While these initiatives may benefit local communities, they have no link to steel production or industrial output, highlighting a misalignment between budget allocations and the steel plant’s original purpose.
The 2026 budget also makes separate provisions for the revitalisation of ASCL and the National Iron Ore Mining Company (NIOMCO) under the Federal Ministry of Steel Development. N150.99 million is earmarked for ongoing revitalisation efforts, while N1.06 billion is allocated for project preparation aimed at investment mobilisation. These funds are meant for feasibility studies, environmental and social impact assessments, and financial modelling for Ajaokuta. Notably, both allocations are lower than those budgeted in 2025, when N2.41 billion was earmarked for project preparation and N250.98 million for revitalisation projects.
The Ajaokuta Integrated Steel Complex was conceived in 1979 as Nigeria’s flagship industrial project. It was intended to drive upstream and downstream industrial development, reduce steel imports, and support economic diversification. The plant is more than a rolling mill; it is an integrated iron and steel facility with four rolling mills: the Billet Mill, Light Section Mill, Wire Rod Mill, and Medium Section and Structural Mill. It uses blast furnace technology, which accounts for approximately 70 per cent of global steel production.
By 1994, the plant was reportedly 98 per cent complete in equipment installation, with 40 out of 43 planned units constructed. Some units were operational at various times, but mismanagement, stalled projects, and lack of operational oversight have left the plant dormant for more than four decades.
According to ASCL, the complex employs about 3,000 people, though it was projected that full commissioning would employ approximately 10,000 directly and 500,000 indirectly across upstream and downstream industries. These figures stand in contrast to the plant’s output, which has remained at zero.
Revival efforts repeatedly stall
Attempts to restart Ajaokuta have been fraught with setbacks. At the 2019 Russia-Africa Summit, then Nigerian president, Muhammadu Buhari and Russian President Vladimir Putin agreed to revitalise the steel mill with Russian support and financing from Afreximbank and the Russian Export Centre. The agreement was delayed due to the COVID-19 pandemic and eventually abandoned.
In January 2024, President Bola Tinubu entered discussions with Chinese steel company Luan Steel Holding Group to revive the plant. Despite ongoing negotiations, no tangible outcomes have been reported. Meanwhile, ASCL continues to receive substantial federal allocations for salaries and allowances, further cementing its reputation as a payroll institution rather than an industrial enterprise.
Over the past decade, the government has spent an estimated N38.9 billion on personnel costs at ASCL. Analysis of annual budgets between 2014 and 2024 reveals a steady rise in allocations, with N3.82 billion budgeted in 2014, N3.8 billion in 2015, N3.55 billion in 2016, and incremental increases thereafter, reaching N3.94 billion in 2022 before dropping sharply to N1.22 billion in 2023.
Accountability concerns mount
Recent investigative hearings have exposed discrepancies between budgeted personnel allocations and actual workforce presence. Senator Natasha Akpoti-Uduaghan, representing Kogi Central, recounted unscheduled visits to the steel complex and found only ten employees on-site despite over N4 billion budgeted for salaries in 2024.
“The sum of N4.2 billion was appropriated for personnel cost in 2024, but from several visits I’ve made to the complex, hardly ten people were sighted to be around or doing anything. So, who are the workers collecting monthly salaries from the appropriated N4.2 billion?” Akpoti-Uduaghan asked during the hearings, highlighting the opaque management of the complex.
The National Assembly has consistently increased allocations for ASCL, often tied to community projects outside Kogi State and unrelated to steel production. In the 2024 approved budget, allocations rose from N4.45 billion in the proposed budget to N5.18 billion, reflecting additional community-focused initiatives.
Financing revival remains a challenge
Shuaibu Audu, the minister of Steel Development,stated in 2024 that the government was at an advanced stage of raising more than N35 billion to restart the Light Mill Section of Ajaokuta. Technical assessments estimate that between $2 billion and $5 billion would be required to fully revive the steel plant within three years. Memoranda of Understanding were signed with a Russian consortium, including Tyazhpromexport, Novostal M, and Proforce Manufacturing Limited, to oversee rehabilitation, completion, and operation of ASCL and NIOMCO.
Industry experts, however, argue that the most effective approach is full or partial privatisation, which could bring in operational efficiency, private capital, and accountability. Without such reforms, the plant risks remaining a government-dependent payroll institution rather than a productive industrial hub.
