Can Nigeria’s long-stalled steel plant truly rise from decades of neglect, or will bold promises once again crumble against the stubborn realities of outdated technology, decaying infrastructure, and fierce global competition? asks Festus Akanbi

For nearly half a century, the Ajaokuta Steel Company in Kogi State has hovered between promise and paralysis, a hulking metaphor for Nigeria’s ambitions gone astray.

Conceived in the late 1970s as the flagship of an industrial revolution, the complex was meant to anchor shipbuilding, construction, transport, automotive, and manufacturing. Instead, it has become a cautionary tale of squandered billions, policy flip-flops, and rusting infrastructure.

Last week, the President of Dangote Group, Alhaji Aliko Dangote, injected an uncomfortable dose of realism into a conversation usually dominated by political optimism. “Ajaokuta will never work,” Africa’s richest man said bluntly in a video that ricocheted across social media. He likened attempts to revive the plant to resurrecting a “dead person” to run a race, arguing that the facility’s Soviet-era design belongs in a different age. Comparing it to putting a long-abandoned Volkswagen Igala beside a modern Kia, he warned that Nigeria is clinging to a technological past that can no longer compete with the speed, efficiency, and environmental demands of today’s steel industry.

A Questionable Sense of Hope

Dangote’s remarks jarred against the upbeat assurances of Professor Andulsalam Naeem, the new managing director of Ajaokuta Steel Company. 

Naeem, who recently received a hero’s welcome in his home community of Ayegunle Gbede, insisted that the plant would roar back to life under President Bola Tinubu’s watch. 

Backed by a “firm assurance” from the president, he has launched a technical audit aimed at diagnosing what must be rehabilitated and what can be replaced. To Naeem, resuscitating Ajaokuta is more than an industrial project; it is a national dream that promises thousands of jobs, a domestic supply chain for construction and machinery, and a symbolic leap towards self-reliance.

The federal government is reinforcing this optimism with a global investment drive.  The Minister of Steel Development, Shuaibu Audu, recently led a delegation to China, wooing leading conglomerates such as Baowu’s SinoSteel, Fangda Steel, and Jingye Group. 

The discussions focused on technical evaluations, operational models, and financing structures to put the dormant complex back to work. Officials say the talks align Nigeria’s ambitions with China’s vast industrial know-how, raising hopes that the long-awaited turnaround might finally materialise.

Drain Pipe

Yet a sober reading of Ajaokuta’s chequered history tempers such enthusiasm. The plant was declared 98 per cent complete as far back as 1984, but it has never produced a single commercial sheet of steel. Instead, it has drained public coffers. Successive budgets allocate billions for salaries and pensions at a facility that produces nothing. 

The 2025 appropriation earmarked another N6.21 billion for wages, underlining what critics call an absurd commitment to a failed enterprise. Over four decades, Nigeria has spent more than $8 billion on Ajaokuta, including a $495 million arbitration payout in 2022 to settle a dispute with an Indian concessionaire.

While the buildings have stood, time has not been kind to the equipment. Installed in the 1980s under Soviet guidance, much of the machinery has corroded or become obsolete. Blast furnaces, designed for an earlier era of energy and environmental constraints, now sit at odds with an industry that prizes efficiency, automation, recycling, and lower carbon footprints. Even if the old lines were restarted, they would struggle against cheaper imports from Asia or newer mini-mills that use electric arc furnaces and flexible production methods. Modernisation on the scale required may cost as much as building an entirely new complex.

Infrastructure Weaknesses

Infrastructure weaknesses compound the challenge. Ajaokuta’s success depends on an integrated chain linking iron-ore beneficiation at Itakpe, transport by rail, steady power supply, and functional ports for imports and exports.

 The Itakpe plant remains underperforming, while the railway meant to connect it to Ajaokuta has suffered delays and partial completion. Power supply in Kogi is erratic and expensive, a crippling liability for an energy-hungry operation like steel-making. Analysts said that these gaps raise production costs and erode competitiveness before the first slab is cast.

Governance has been another Achilles’ heel. Over the years, Ajaokuta has been buffeted by abrupt concessions, revocations, lawsuits, and opaque deals. Each change of administration has brought new committees, memoranda, and pledges, but rarely the consistency needed for a heavy industrial project that thrives on long planning horizons. Even promising moves, such as the 2024 memorandum with Russia’s Tyazhpromexport, the original builders, risk fizzling out without sustained political will and clear legal frameworks.

Proponents of revival argue that these obstacles, though formidable, are not insurmountable. They point to the technical audit now underway and to potential Chinese financing as signs of seriousness. They cite success stories where privatisation and fresh capital turned around moribund assets: Brazil’s Companhia Siderúrgica Nacional became Latin America’s largest steel exporter after leaving state hands; South Korea’s POSCO, once state-owned, now ranks among the world’s top producers. 

Within Nigeria, the telecom revolution that followed the liberalisation of NITEL and Indorama’s transformation of Eleme Petrochemicals proves that neglected assets can thrive when freed from government lethargy.

White Elephant Project

But Ajaokuta’s scale, age, and cost profile distinguish it from those examples. The sunk cost fallacy looms large: officials often double down because so much has already been invested, even when economic logic suggests a rethink. Building a smaller, modern mill using compact strip production or electric arc technology could deliver more steel at lower cost than retrofitting hulking Soviet furnaces. Around the world, newer plants favour modularity and energy efficiency over monolithic giants conceived during the Cold War.

Time is another adversary. The Tinubu administration has signalled its intent to deliver results within its tenure, yet turning around decades of neglect is not a sprint. Negotiating and finalising partnerships, overhauling decayed infrastructure, training a skilled workforce, and installing modern environmental controls are multi-year undertakings. Rushing risks half-measures that repeat the errors of past governments, leaving Nigeria saddled with yet another costly white elephant.

Dangote’s warning is simply not pessimism; it reflects an operator’s eye for cost and competitiveness. His own group runs some of Africa’s most sophisticated manufacturing plants, from cement to fertiliser, and he knows that industrial success depends on technology, supply chains, and price discipline as much as patriotic zeal. To him, Ajaokuta represents a structural mismatch between an outdated design and the realities of a global steel market that produced 1.89 billion tonnes last year, dominated by efficient Asian mills.

That global context matters. Egypt turns out about 10.6 million tonnes of steel annually, South Africa around 4.9 million, while Japan, despite importing iron ore, produces nearly 90 million tonnes. Nigeria, sitting atop over three billion tonnes of iron ore, manages only about 2.2 million tonnes a year, mainly from scraps and imported billets. Ajaokuta’s theoretical capacity of 1.9 million tonnes, expandable to five million, could change that equation, but only if it operates competitively. Otherwise, it will remain a sentimental relic overshadowed by imports that meet builders’ needs more cheaply and reliably.

Privatisation Option

Some argue that privatisation offers the cleanest route out of the quagmire. Selling the complex transparently to a consortium with proven expertise and deep pockets could shift the risk away from taxpayers and inject efficiency. The federal government’s role would then focus on regulation, infrastructure, and incentives rather than daily operations. Critics caution, however, that poorly structured sales, such as the ill-fated Indian concession, can backfire, leaving Nigeria to foot huge bills. Success hinges on openness, enforceable contracts, and an end to political interference.

A clear-eyed path forward would begin with an honest assessment: is it cheaper and smarter to revive Ajaokuta as is, to radically redesign it, or to channel resources into newer, flexible mills closer to raw materials and energy sources? Policymakers must weigh social goals like job creation and regional development against fiscal prudence and market realities. Romantic attachment to a 40-year-old vision cannot substitute for rigorous cost-benefit analysis.

For ordinary Nigerians, the debate is more than technical. It is about credibility and national self-respect. The steel mill has become shorthand for broken promises, a monument to the chasm between ambition and execution. Every fresh announcement of committees or foreign talks evokes déjà vu among citizens weary of grand pronouncements unmoored from results.

If Ajaokuta is ever to rise, it will require more than presidential speeches or ceremonial receptions. It will demand a level of discipline, expertise, and follow-through rarely sustained in Nigeria’s public sector. It will require financing models that protect the treasury while attracting world-class partners, and governance strong enough to keep vested interests from hijacking the process.