The Minister of Steel Development, Shuabu Abubakar Audu, has disclosed that a funding gap of about N3 trillion and alleged opposition from vested interests in the steel import business are among the major obstacles delaying the revival of the Ajaokuta Steel Complex in Kogi State.
Audu made the disclosure during an interview on the Deep Insight with Agbonsuremi podcast, where he said successive governments had also failed to demonstrate the political will and provide sufficient funding needed to complete the long-abandoned project.
The minister alleged that individuals benefiting from Nigeria’s annual steel imports were working against efforts to develop a strong domestic steel industry.
According to him, some of the vested interests have allegedly attempted to frustrate the government’s plans, including moves to amend relevant legislation at the National Assembly.
Ajaokuta Steel Complex was conceived in the 1970s as a major driver of Nigeria’s industrialisation and steel sufficiency. However, decades of neglect, contractual disputes, legal battles and alleged sabotage have left the project largely dormant.
Audu said Nigeria currently imports about $4 billion worth of iron and steel annually, arguing that the development of local production would significantly reduce the country’s dependence on imports.
“The people that are benefiting from imports of $4bn in terms of iron and steel annually would fight tooth and nail to prevent the local industry from kick-starting,” he said.
The minister said the government was unwilling to commit the required N3 trillion in public funds to the project, noting that Ajaokuta received only N500 million in the 2025 budget, with N50 million allocated for capital expenditure.
He, however, expressed optimism that the complex could be revived through a proposed partnership with a Chinese investor.
According to Audu, the investor is considering committing between $1.5 billion and $2 billion in cash and equipment to the project.
He said the Federal Government was considering a production-sharing arrangement under which the investor would recover its investment from production before ownership of the facility eventually reverts to the government.
Audu said negotiations with the Chinese investor were ongoing and expressed hope that an agreement would be concluded this year.
He added that if the deal is successfully concluded, Ajaokuta could commence commercial production by 2028.
The minister said the government had initially explored working with Russian equipment manufacturers but shifted its attention to China following the Russia-Ukraine war.
He also disclosed that an ongoing technical and financial audit would determine the exact condition of the complex. He estimated that about 70 per cent of the facility remains useful, while the remaining 30 per cent requires significant rehabilitation and upgrading.
Audu further revealed that the Federal Government had signed a 20-year gas supply agreement with the Nigerian National Petroleum Company Limited to provide gas to Ajaokuta.
He said the government had also reached an agreement with the Ministry of Defence and the Defence Industries Corporation of Nigeria to utilise part of the complex for the production of military hardware, including helmets, bulletproof vests and ammunition.
The minister projected that the steel sector could contribute about $100 billion to Nigeria’s economy if Ajaokuta, Delta Steel and other major facilities operate at full capacity.
He also estimated that the revival of the country’s major steel plants could create between 500,000 and one million jobs.
Audu pointed to Nigeria’s estimated three billion metric tonnes of iron ore deposits in Kogi State as a major advantage for the development of a sustainable domestic steel industry.
He said his ministry was working towards three major objectives: securing an agreement for the revival of Ajaokuta, reviving Delta Steel and implementing a 10-year blueprint for the broader development of the steel sector.
The minister also linked the completion of the project to political continuity, urging Nigerians to support President Bola Tinubu’s re-election.
“We are hoping, praying, that the President gets a second term so that we can have a 2030 $1tn economy,” Audu said.
He expressed confidence that the government could achieve its objectives, adding, “Absolutely, I believe I can do it. And I believe that I will do it.”
Deep Insight With Agbonsuremi is a Podcast anchored by veteran journalist and broadcaster, Augustine Okhiria Agbonsuremi.
