Federal Government Allocates N6 Billion For Ajaokuta Steel Workers In 2025 Budget
The Federal Government has earmarked ₦6.21 billion for the salaries of workers at the dormant Ajaokuta Steel Company in the proposed 2025 budget, reflecting a 44.76% increase from the ₦4.29 billion allocated in 2024.
This substantial allocation comes despite the company’s longstanding inactivity, with no steel production achieved since its establishment in 1979. The Ajaokuta Integrated Steel Complex was envisioned as a cornerstone of Nigeria’s industrialisation, designed to host a metallurgical process plant, engineering facilities, and auxiliary units capable of generating extensive economic activity.
At its peak, the complex was expected to employ 10,000 people directly and support an estimated 500,000 jobs through associated industries nationwide. However, over four decades of mismanagement have left the project incomplete, with only 40 of its 43 planned units constructed by 1994.
Efforts to revive the plant have faced numerous hurdles. Agreements reached at the 2019 Russia-Africa Summit for its revitalisation, involving funding from Afreximbank and Russian entities, were stalled by the COVID-19 pandemic. More recently, discussions with China’s Luan Steel Holding Group have yet to yield tangible results.
Despite its inactivity, Ajaokuta Steel Company has continued to receive significant budgetary allocations. Between 2014 and 2024, the government disbursed ₦38.9 billion in salaries and allowances for the company’s workers, with the 2025 allocation set to bring the total to ₦45.11 billion over 11 years.
The proposed 2025 budget allocates 91.19% of the steel company’s ₦6.81 billion funding to personnel costs, alongside ₦233.63 million for overheads and ₦366.86 million for capital expenditure. Additionally, the Ministry of Steel Development plans to spend ₦2.41 billion on project preparations to attract investment and another ₦250.98 million to revitalise both Ajaokuta Steel and the National Iron Ore Mining Company.
In an encouraging move, the Ministry has signed a Memorandum of Understanding with a Russian consortium, including Tyazhpromexport, Novostal M, and Proforce Manufacturing Limited, to rehabilitate and complete the steel complex.
Minister of Steel Development, Shuaibu Audu, recently disclosed that efforts are underway to raise over ₦35 billion for the restart of the Light Mill Section of the plant. Experts estimate that between $2 billion and $5 billion will be required to fully revitalise the facility within three years.
While some stakeholders argue for privatisation as the most viable option to maximise the company’s potential, the Federal Government remains adamant to restoring Ajaokuta Steel as the bedrock of Nigeria’s industrial growth, however at the expense of many unaccountable funds.
