…Over N6bn Budgeted As Salaries To Non-Existing Staff In 2025 – Investigation ….Plant, Nigeria’s Unfulfilled Industrial Dream, Say Experts …Privatise Steel Firm Now — Investor The Ajaokuta Steel Company, once envisioned as the foundation of Nigeria’s industrial revolution, remains a haunting symbol of unrealised potential. Four decades after its inception, the massive complex remains mostly idle, a stark reminder of corruption, mismanagement, and political instability. The “sleeping giant,” as it is commonly referred to, continues to drain resources and fuel national disappointment, raising concerns about Nigeria’s industrial ambitions and the future of this once-promising project. ROLAND OGBONNAYA and TOYIN ADEBAYO write. For more than four decades, the Ajaokuta Steel Company Limited (ASCL) has served as a stark symbol of Nige-ria’s failed industrialisation efforts, a testament to a recurring story of wasted potential, corruption, and policy inconsistencies. This sprawling complex, de-signed as the foundation of Nige-ria’s economic diversification, is largely dormant, a constant drain on the country’s resources. The latest round of scrutiny by the Na-tional Assembly, highlighted by the Senate Ad-hoc Committee’s investi-gation into alleged corruption and inefficiency, only emphasises the tragic reality: Ajaokuta remains a financial black hole, consuming billions of naira per year with little to no return. The failure of the Ajaokuta Steel Complex to take off, even after 40 years, is a complex issue caused by a combination of factors. A former management staff member who did not want his name printed listed some of the factors that have kept the steel complex down, including political instability and policy in-consistency. Nigeria, he said, has seen numerous changes in govern-ment, both military and civilian, since the complex’s inception. Each new administration frequently had its own priorities and lacked the commitment to consistently carry out the previous plans for Ajaokuta. This political instability resulted in frequent policy changes affect-ing the steel industry. Privatisation plans were announced and then reversed, contracts were cancelled and re-awarded, and funding com-mitments changed. This uncertain-ty discouraged long-term invest-ment and slowed progress. Contract inflation, waste, and allegations of corruption have plagued the Ajaokuta project since its inception. Contracts were report-edly inflated, funds were misappro-priated, and the project’s manage-ment was lacking in transparency. The complex suffered from poor management practices, such as a lack of technical expertise and an inability to effectively oversee the plant’s construction and operation, and the project was consistently underfunded, despite significant investments. The necessary funds to complete the project were not con-sistently allocated or released, re-sulting in delays and cost overruns. “Ajaokuta incurred significant debt as a result of the lengthy con-struction period and numerous con-tractor disputes. This debt burden hampered efforts to complete and operationalise the work,” the for-mer employees stated. Others include the complex’s ini-tial design and construction, which relied heavily on foreign expertise, particularly from the Soviet Union. This resulted in a reliance on for-eign technology and a shortage of local capacity to maintain and oper-ate the plant. This was exacerbated by a prolonged period of inactivity, and partial operation resulted in the deterioration of plant equipment and infrastructure. Proper mainte-nance was neglected, complicating the task of restoring the complex to full operation. Disputes with contractors, par-ticularly with the Russian firm TPE (Tyazhpromexport), resulted in lengthy legal battles, delaying the project and increasing costs. These disagreements centred on claims of contract breaches and non-perfor-mance. The initial project contracts may have been poorly structured or ambiguous, resulting in disagree-ments and disputes. Furthermore, the steel complex requires a consistent and substan-tial power supply, which has been a persistent issue in Nigeria. The lack of adequate power infrastruc-ture has hampered the plant’s op-erations. In addition, Ajaokuta is located in an area with a poor transportation network, making it difficult to transport raw materials to the plant and finished products to the market. The current Senate inquiry, which focuses on the N4.2 billion budgeted for worker salaries in the current fiscal year, has sparked familiar outrage. Senator Natasha Akpoti-Uduaghan (PDP, Kogi Cen-tral), who represents the constitu-ency where the plant is located, ex-pressed her dismay, stating that her visits to the complex rarely yielded more than a handful of workers. “The sum of N4.2 billion was appropriated for personnel costs in 2024, but from several visits I have made to the complex, hardly 10 peo-ple were seen to be around or doing anything,” she complained. “So, who is collecting month-ly salaries from the appropriated N4.2 billion?” This raises serious concerns about the actual number of employees and the justification for such a large allocation given that the plant has produced virtually nothing since its commissioning in 1978. The present situation is not an isolated incident. A 2024 report from BudgIT’s GovSpend platform revealed that over N1.1 billion was spent in the past two years alone on pensions, taxes, and various “social projects,” despite the plant’s closure. These funds are being used to pay pensions to management compa-nies such as Pension Alliance Limit-ed (N74,434,667.03) and Trust Funds Pensions PLC (N33,581,935.80), as well as tax obligations to Kogi State (N141,911,731.02) and com-munity empowerment projects through Stefan Jaeger Nigeria Ltd. (N37,162,790.02). The allocation of N354,286,069.55 to the IPPIS Trans-action Account demonstrates the significant administrative costs as-sociated with keeping this dormant entity running. The frustration is palpable, espe-cially given the initial promise and potential of Ajaokuta. Conceived in 1979 and declared 98% complete by 1984, the complex covers 24,000 hectares and includes 43 plants, 40 of which were reportedly built. Its intended output included steel bil-lets, sheets, strip and angle metals, wire rods, and rebars, all of which are essential components in con-struction, manufacturing, and other industries. The plant was designed to use blast furnace technology, which accounts for approximately 70% of global liquid steel production. At its peak, the complex was expect-ed to directly employ 10,000 people and generate an additional 500,000 jobs in upstream and downstream industries. Despite these promising projec-tions, Ajaokuta has been plagued by a litany of problems. “Why Ajaoku-ta has failed to take off 40 years after it was declared 98% complete defies comprehension, despite its poten-tial to kick-start Nigeria’s industrial development.” Sixteen presidents/ heads of state have come and gone since the inception of steel rolling mills in 1958, and ten have been in charge since the plant was declared nearly complete. This demonstrates a systemic failure, not just one ad-ministration, but an ongoing cycle of neglect and misdirection. There have been claims that failed attempts at revival are due to “a glaring lack of commitment, policy somersaults, and attempts to outsource solutions to a problem that should be addressed in-house.” The repeated attempts to revive Ajaokuta by enlisting foreign firms have largely failed, often at a high financial cost. The Senate panel’s outrage over the $495 million out-of-court settle-ment paid to Global Infrastructure Nigeria Limited in 2022, despite the company’s lack of investment, is an excellent example. This deal, viewed as a blatant waste of resources, fu-elled public skepticism about the government’s handling of the Aja-okuta saga. Recent efforts by the Bola Tinubu administration to revive the plant have been met with skepticism. The administration is reportedly consid-ering hiring a Chinese firm, Luan Steel Holding Group, for a fee rang-ing from $500 million to $2 billion. However, the argument concludes that this is a “failed route.” The ongoing discussions with foreign entities, including a planned trip to Russia to secure funding for the plant’s revival, raise concerns about increased reliance on exter-nal actors and the risk of continued financial mismanagement. The recent appointment of Engr. Nasir Abdulsalam as Managing Di-rector of Ajaokuta Steel Company Limited (ASCL) is the latest attempt to resurrect the dormant giant. Ab-dulsalam is tasked with leading the charge towards revitalisation, and he bears the weight of a nation’s industrial hopes. This is not the first time Nigeri-ans have heard that Ajaokuta will rise again. In 2024, a team of 23 Rus-sian engineers visited the facility to assess its condition. Their arrival rekindled hopes for a turnaround, paying tribute to the original build-ers, the Russians, who laid the groundwork in 1979. However, the optimism faded when the visit con-cluded without a formal agreement. Shortly after, the plant’s sole admin-istrator resigned amid an investiga-tion by the Economic and Financial Crimes Commission (EFCC). The situation was exacerbated by revelations that over N6 billion in salaries were paid to employees at the inactive plant in 2025 alone, inciting public outrage and high-lighting the scope of the facility’s mismanagement. Prince Shuaib Abubakar Audu, Nigeria’s Minister of Steel Develop-ment, has emerged as a key figure in the country’s renewed push for industrialisation. Speaking at a recent stakehold-ers’ forum in Abuja, the minister reaffirmed the government’s de-termination to make Ajaokuta a viable economic asset rather than a political project. “We are currently conducting a comprehensive audit to assess the condition of the facility,” Prince Audu stated. “We are also review-ing investment proposals from both local and international players with the capacity and experience to man-age large-scale steel production.” The minister reiterated that the government is leaning towards a Public-Private Partnership (PPP) model that is supported by legisla-tion, transparency frameworks, and performance metrics. “Our goal is not to run the steel plant directly. The goal is to estab-lish a regulatory and operational framework that allows private in-vestors to thrive while protecting national interests,” Prince Audu added. According to Adeniran Ajibade, a metallurgical engineer and board member of the Miners Association of Nigeria, the problem is not a lack of will, but a misalignment of strat-egy. “Steel projects are too capital-in-tensive and technically complex for governments to manage directly,” Ajibade explained. “The private sector must lead, with the government serving as a regulator and enabler. That is the only way to ensure sustainability.” Ajibade emphasised that Ajaoku-ta’s technological design is funda-mentally flawed. “The plant is based on the blast furnace method, which requires coking coal, which Nigeria does not have in commercial quan-tities. We should have used a shaft boiler or direct reduction technolo-gy, both of which use natural gas, which we have in abundance.” He used Delta Steel Company in Aladja as an example of what could have been done properly. The company, which used the direct re-duction method, began well but ul-timately failed due to poor manage-ment and a lack of accountability. “Even with the right technology, without competent leadership and clear operational structures, we will keep repeating history,” Ajibade said. According to Ajibade, Nigeria’s steel demand has increased dramat-ically in recent years. “We import nearly 70% of our steel needs, pri-marily flat products and structural steel. If Ajaokuta goes online, it can save billions of dollars in foreign exchange while also creating jobs in the mining, construction, and transportation sectors.” While the intentions may be genuine, several legal and technical challenges await. The decade-long arbitration with Global Steel Hold-ings Limited, a concessionaire that failed to deliver on its promises, has made the government and potential investors wary. Ifeoma Nwosu, a legal analyst with experience in infrastructure contracts, believes that unresolved litigation remains a major red flag. “Before any serious investment can occur, Nigeria must clear the legal slate. Investors require clari-ty regarding liabilities, ownership structure, and dispute resolution mechanisms.” On the technical front, Engr. Chinedu Agbo, a former ASCL con-sultant, stated that some plant parts are beyond repair. “Most of the imported Soviet-era machines were never installed. Those that were have deteriorated dramatically. Ajaokuta’s revival requires more than just repairs. It necessitates re-engineering from the ground up using modern tech-nology that meets today’s industry standards,” he stated. Critics claim that Ajaokuta has become a money pit. Ibrahim La-wal, Executive Director of the Re-source Justice Initiative, believes that the plant has been converted into a payroll scheme. “Over N6 billion in salaries for a factory that has not produced a sin-gle steel billet in recent years? That is not development. That is systemic fraud,” he fumed. Lawal advocated for a complete overhaul of the plant’s governance framework, including the remov-al of political appointees and the transition to merit-based technical leadership. Dr. Mary Okonkwo, an industrial policy analyst, concurred. “Ajaoku-ta is not all about steel. It is about national development. It is about creating value, transferring skills, and integrating infrastructure. But in order to realise that potential, we need strategy, structure, and, most importantly, sincerity.” Experts propose a multi-phase approach to revitalising Ajaokuta. Comprehensive Technical Au-dit: Determine the true state of the plant, identify salvageable units, and develop cost-effective moderni-sation strategies. Legislative Clarity: Enact laws that protect investor interests, de-fine public-private roles, and avoid future legal entanglements; and PPP Implementation: Choose cred-ible investors through transparent bidding processes and award per-formance-based contracts. Capacity Development: Establish technical institutions to train local workers in metallurgy, engineering, and operations management. Supply Chain Integration: Con-nect the plant to mining areas, power plants, and transportation infrastructure to create a viable in-dustrial corridor. Anti-Corruption Measures: Im-plement stringent accountability systems to prevent political inter-ference and misappropriation of funds. Ajaokuta Steel Company is more than just a factory. It represents Ni-geria’s aspirations, failures, and un-wavering hope for a better future. With the right leadership, political will, and private sector expertise, the plant can still fulfil its original purpose. Minister Shuaib Audu stated succinctly: “Ajaokuta must rise, not only for Kogi State, but for the future of industrial Nigeria.” It remains to be seen whether this latest effort will be a new be-ginning or just another footnote in a long history of failed attempts. However, one thing is certain: Ni-geria can no longer afford to get it wrong.If Ajaokuta succeeds, it will do more than just produce steel; it will restore faith in the country’s ability to transform dreams into reality. However, the proposed 2025 bud-get for Ajaokuta Steel Company confirms this unsustainable pat-tern. The budget estimates a total expenditure of N6,810,967,394, with N6,210,482,358 set aside for person-nel costs alone. This figure is a significant increase over the N4.29 billion allocated in the 2024 budget, despite the plant’s continued inac-tivity. The allocation of N2,406,666,667 for project preparation and invest-ment mobilisation, which includes feasibility studies and financial modelling, indicates a lack of con-crete progress and a preference for preliminary assessments over ac-tual implementation. Even in its current state, the company intends to spend N10,000,000 to computer-ise its commerce and procurement departments, a seemingly incon-gruous expense given the plant’s operational status. Some observers attribute Ajao-kuta’s failure to deeper historical and political issues. Mr. Ebube Ebi-sike George, an investment expert, claims that the plant’s original loca-tion was influenced by “Igbophobia” following the Biafran war. According to George, Ukrainian design consultants originally sug-gested locating the Steel Mill out-side of Onitsha. It was subsequently relocated to Kogi State. George also claims that inadequate and incon-sistent government funding, com-bined with internal crises and red tape, has had a significant impact on the plant. The economic consequences of Ajaokuta’s failure are significant. While Nigeria struggles to develop its manufacturing sector, Egypt and South Africa have much higher steel production rates. Egypt pro-duces approximately 10.6 million tonnes of steel per year, while South Africa produces 4.9 million tonnes, according to the World Steel Associ-ation. In contrast, Nigeria produces only 2.2 million tonnes, relying on scraps and billets imported primar-ily from China. Ajaokuta alone has the capac-ity to produce 1.3 million tonnes of crude steel, which remains untapped. The reliance on steel imports, which total $4 billion per year, exacerbates Nigeria’s econom-ic vulnerabilities. The advantages of a functional steel industry go beyond just pro-duction numbers. Steel production is a major economic driver, support-ing a wide range of industries such as automobiles, shipping, railways, construction, manufacturing, and fabrication. The sector employs a diverse workforce, ranging from un-skilled labourers to highly skilled engineers and designers. To break the cycle of waste and unfulfilled potential, economist Dr. Tunji Oyeyipo suggests a decisive solution: privatisation. “Tinubu must make the plant operational if Nigeria is to realise its industrialisation potential. So, in order for Ajaokuta to function, the government should privatise it.” Privatisation, if carried out transparently and with proper safe-guards, has the potential to attract private investment, expertise, and efficient management, transform-ing Ajaokuta from a financial bur-den to a productive asset. However, privatisation is not a panacea. To avoid making the same mistakes in the past, careful plan-ning, diligence, and a commitment to transparency are required. The government must ensure that any private entity that takes over Aja-okuta has the necessary technical expertise, financial resources, and a long-term vision for the plant’s continued operation. Essentially, the Ajaokuta Steel Company remains a symbol of Ni-geria’s untapped industrial poten-tial, a monument to squandered re-sources and missed opportunities. The ongoing Senate investigation and the proposed 2025 budget high-light the continued drain on public funds that yields little to no return. While efforts to revive the plant are ongoing, a significant shift in strat-egy is required. Privatisation, combined with a strong commitment to transparen-cy and accountability, has the poten-tial to transform Ajaokuta from a financial liability to a critical driver of Nigeria’s economic diversifica-tion and industrial growth. As Mr. George states, “Political will, strategic planning, the remov-al of foreign interference, and ade-quate funding may be able to revive the Ajaokuta Steel Mill hurdle, al-lowing for rapid industrialisation.” Until then, Ajaokuta will serve as a stark reminder of Nigeria’s proclivity for failure in critical sit-uations. Furthermore, the failure of the Ajaokuta Steel Complex is a mul-tifaceted problem caused by politi-cal instability, corruption, funding constraints, technical challenges, legal disputes, and infrastructure deficiencies. To ensure that this crit-ical project is completed and oper-ated successfully, the government, private sector, and international partners must work together to ad-dress these issues.