Abuja: The non-functional Ajaokuta Steel Company Limited (ASCL) imposes an annual financial burden of more than N1 billion on the country in terms of pensions, salaries, taxes, and administrative costs, revealed Prof. Linus Asuquo, Director-General of the National Metallurgical Development Centre, Jos, during a panel discussion at the first National Steel Summit in Abuja.
According to News Agency of Nigeria, the financial strain of Ajaokuta has escalated, with approximately N1.11 billion spent over the last two years, as highlighted in a 2024 report by BudgIT’s accountability platform. Prof. Asuquo detailed the challenges faced by the steel company, identifying issues such as a substantial financial burden, mismanagement, corruption, and a fragmented value chain infrastructure. He noted that Nigeria has invested over eight billion U.S. dollars in the Ajaokuta project over a span of more than four decades.
Prof. Asuquo attributed the project’s derailment to persistent mismanagement and policy failures, citing instances of fund misappropriation and unsuccessful concessionaire deals with entities like the Japanese Kob Steel and India-based Global Steel Holdings Limited (GSHL). He emphasized the disconnection in the value chain infrastructure, pointing out that the iron ore mines at the National Iron Ore Mining Company in Itakpe, Kogi, have remained inactive, and the rail line essential for transporting ore from Itakpe to Ajaokuta was only completed and inaugurated in 2020 after delays and vandalism.
Additionally, Prof. Asuquo highlighted the challenges of obsolete technology and degraded equipment, with much of the machinery installed at the plant having deteriorated over the years, lacking modern energy-efficient steel-making technologies. He also mentioned unresolved issues of local community displacement, noting that 13 villages were displaced when the plant was initially established.
Looking ahead, Prof. Asuquo proposed rebuilding the integrated supply chain and adopting modern mini-mill technologies as the way forward. He recommended a shift from large-scale blast furnaces to compact strip production (CSP), a more cost-effective and energy-efficient technology that can be rapidly constructed and operationalized. He also suggested adopting private sector concessions, moving away from government management to strategic private investors with proven expertise.
Prof. Asuquo further outlined the potential for ASCL to function as an industrial park and free trade zone, emphasizing the need for community and civil society engagement through Environmental and Social Impact Assessments (ESIA). He stressed the importance of revitalizing Nigeria’s underutilized legacy steel assets, which are equipped with outdated machinery, and called for policy and institutional reforms alongside strategic public-private partnerships.
The D-G underscored additional measures such as improvements in infrastructure and energy, research and development, human capital development, raw materials exploration and processing, and sustainable financing mechanisms. He concluded by stating that revitalizing Nigeria’s legacy steel assets is a national imperative, and with political will, coherent policies, private sector collaboration, and sustained investment, the steel sector could become a pivotal driver of industrialization and economic transformation.
The summit was themed “Rebuilding and Consolidating Nigeria’s Steel Industry: Collaborative Action for Sustainable Growth and Global Competitiveness.”