Steel imports bleed Nigeria’s economy 

***As import bill exceeds N1trn

***Minister puts figure at N5.6trn

***Devt represents failed promises

By Emma Ujah, Abuja Bureau Chief

Nigeria spent over N1 trillion on steel importation in 2025, according to available data from the National Bureau of Statistics, NBS.

This is despite the abundant raw materials for steel production in the multi-billion-dollar Ajaokuta Steel Complex in Kogi State, left idle for over four decades.

The steel industry is widely regarded as the bedrock of industrialisation. 

Across the world, countries seeking sustainable economic growth have prioritised steel production because of its critical role in manufacturing, construction, transportation, infrastructure, defence and other strategic sectors.

Available data from the NBS showed that Nigeria’s iron and steel imports consumed an average of about N526 billion annually over the past six years. 

In 2025 alone, the value rose above N1 trillion, and these figures represent officially recorded trade and do not capture unrecorded or under-reported imports.

The scale of the problem becomes even more massive from the assessment of the Minister of Steel Development, Prince Shuaibu Abubakar Audu, who has said Nigeria spends an estimated $4 billion (about N5.6 trillion) annually on iron and steel imports.

Ajaokuta Steel Complex was conceived as an integrated metallurgical complex capable of producing up to 5.2 million tonnes of liquid and finished steel products annually.

Its planned output included heavy plates, flat sheets, wire rods, bars, structural shapes and industrial chemical by-products.

Beyond meeting domestic demand, the complex was designed to supply steel to West African countries and, eventually, other African markets.

If fully operational, Ajaokuta could become one of the pillars of Nigeria’s industrial transformation.

Analysts say the project could create hundreds of thousands of direct jobs and millions of indirect jobs across mining, engineering, manufacturing, construction, transportation and other sectors.

Domestic steel production would also reduce the country’s import bill, conserve foreign exchange and potentially generate export earnings.

A functioning steel industry would provide critical inputs for automobile manufacturing, road and rail construction, housing, machinery, fabrication and other downstream industries.

Organised labour gives insight

Speaking to Financial Vanguard on the state of the nation’s steel sector, President of the National Association of Steel Workers, Oyabugbe Sunday, said Nigeria currently exports raw materials while importing finished steel products at significantly higher costs, thereby limiting domestic value addition, industrialisation and sustainable economic growth.

On the annual import bill, he stated: “Nigeria spends several billions of US dollars annually importing iron and steel products, resulting in a substantial outflow of foreign exchange. 

‘’Industry estimates indicate that the country’s annual steel import bill is approximately $4 billion, although the exact amount fluctuates, depending on import volumes and global market prices.”

On the cost of reviving the steel plant, he said: The last audit of Ajaokuta Steel Company reportedly indicated that the project was about 95 per cent complete and required approximately $1.5 billion to become operational.

Past failed attempts to revive Ajaokuta

Efforts to revive Ajaokuta steel through private-sector concessions have a long and troubled history, with successive arrangements by past administrations ending in failure, controversy and costly legal dispute.

The first major concession came under the administration of former President Olusegun Obasanjo, who expressed his determination to revive the plant. 

In June 2003, the federal government entered into a 10-year concession agreement with SOLGAS Energy Limited, an American company, to rehabilitate, complete, commission and operate the Ajaokuta Steel Complex.

Despite assurances, the company failed to deliver on its obligations, and the federal government terminated the concession in 2004 for non-performance.

The failure of SOLGAS was not a surprise to those who followed the concession arrangement. Experts earlier argued that the company did not have the technical know-how to deliver on the deal and advised the government not to seal it.

The government then turned to Global Infrastructure Nigeria Limited, GINL, linked to Indian steel magnate, Pramod Mittal’s Global Steel Holdings.

In August 2004, GINL received a 10-year concession to rehabilitate, complete, manage and operate Ajaokuta. The transaction was heavily criticised for lacking transparency. 

The Bureau of Public Enterprises, BPE, with the statutory mandate to privatise government companies was never involved in any of the deals.

Again, the arrangement failed. It also became the most controversial of all concession deals on the steel complex. 

In 2007, shortly before the end of the Obasanjo administration, the concession arrangement was converted into a share-sale agreement under which the federal government agreed to transfer 60 per cent of Ajaokuta Steel Company to GINL for $525 million. 

Rather than improving the state of the plant, the Indians allegedly began to asset-strip the company. They were alleged to have made no investments in the complex. 

The incoming administration of Late President Umaru Musa Yar’Adua subjected the arrangement to scrutiny, following allegations concerning the manner the concession had been handled. 

An administrative panel was established in 2007, and the government subsequently terminated the concession in 2008, citing breaches of the agreement. 

The government’s decision was based on the findings of the panel which included asset stripping and failure to provide the required financing. 

It was learnt that the no-nonsense Late Yar’Adua directed that the matter be taken over by the Economic and Financial Crimes Commission, EFCC, and prosecute the Indians to ensure they faced justice but that directive was never carried out. 

Sources said the selfish interests of government officials sabotaged the late president’s directive, especially when he took ill and was no longer in charge of government. 

GINL rejected the government’s action and took the matter to the International Arbitration Panel, IAP, in London. 

The dispute dragged on for many years, thereby complicating further efforts to bring in a new investor or concessionaire for Ajaokuta. 

The dispute lasted through former President Goodluck Jonathan’s administration and almost throughout the eight years of late President Muhammadu Buhari’s administration. 

There was a twist towards the end of Buhari’s administration as the federal government suddenly decided to settle out-of-court with the Indians, even when those familiar with the case said Nigeria had a good case and was on its way to winning. 

With the advice of Buhari’s Minister of Justice, Abubakar Malami, SAN, the federal government paid a whopping $496 million to the Indians in negotiated settlement said to have been reduced from an initial $5.27 billion legal claim to end the dispute and fully reclaim Ajaokuta Steel Complex.

Over the years, Ajaokuta’s problem has not been a shortage of investors but successive administrations’ failure to maintain a transparent, technically credible and politically consistent framework capable of protecting the national interest, while not giving competent operators the certainty needed to invest.

Russians’ desire to return to Ajaokuta

Following the Russia-Africa Summit hosted by the Russian President, Vladimir Putin, in Sochi, in October 2019, Nigeria secured a promise by the Russians to provide funding and technical know-how to complete Ajaokuta.

The Russians (and Ukranians) who built the complex (under the Soviet Union) offered to provide $460 million. They agreed to invest in Ajaokuta through the Russian Export Centre.

In order to ensure that inadequate funding did not provide further excuses for the non-completion of the complex, the African Export-Import Bank (AfreximBank), with Prof Benedict Oramah as President at the time, also agreed to provide the balance of $1 billion.

However, even when it was learnt that the Russians were eager to deploy their technical know-how and finance to help complete the project and despite AfreximBank’s readiness to provide the balance of the needed funding, Buhari and his team failed to sign the agreement with the Russians until he left office.

Rather than take action, it was mere rhetoric on the part of the federal government.

In May 2020, the government set up the Ajaokuta Presidential Project Implementation Team, APPIT, aimed at driving the process of all that was needed to quickly complete and inaugurate the plant.

APPIT had then Secretary to the Government of the Federation, SGF, Mr. Boss Mustapha, as Chairman, with the last Minister of Mining and Steel Development, Arc. Olamilekan Adegbite, as Alternate Chairman.

Mustapha, who himself inaugurated APPIT, said on the occasion: “The Ajaokuta Steel plant has languished in economic unproductivity for about four decades and previous efforts at reviving it had proved abortive.

“This has resulted in avoidable massive foreign exchange losses at intolerable opportunity cost to the country. The pressing need to redress these avoidable challenges has necessitated this Presidential intervention at this time. This is further underscored by difficulties being witnessed with present challenges in the global oil industry.”

The chairman stressed the importance of the Ajaokuta steel plant to the country, explaining that it presented a unique opportunity to make it become West Africa’s largest fully integrated producer and most importantly, to accelerate industrialisation in steel-related industries.

The SGF said further: “The inauguration of the Ajaokuta Presidential Project and Implementation Team, APPIT, is therefore meant to kick start the process of re-directing the activities of the steel plant, with the aim of bringing the steel project back to life for the growth and economic development of our dear nation.”

Conflict of Interest

Vanguard investigations have shown that the team did not make much progress because some members were out to see how much of the $1. 5 billion they could grab.

It was learned that some members were trying to take advantage of the fourth Term of Reference, which is to “scrutinise and assemble Nigerian Content Engineering, Procurement and Construction, EPC, Special Purpose Vehicle Contractors which will embody the co-concessionaire representing Nigeria’s interest in the Build-Operate-Transfer, BOT, concession.”

The affected members of the team, Vanguard gathered, tried to select their own private company as one of the SPV contractors that would provide consultancy services to the Nigerian Co-Concessionaire. The fees being proposed for them were said to have been put in hundreds of millions of dollars. 

A high ranking member of the team was said to be working with this group on this route of clear conflict-of-interests.

This development came to the knowledge of some of the APPIT members and caused a disquiet among them, which eventually frustrated the team’s work until Buhari left office.

Buhari’s last Minister of Mines and Steel Development, Arch. Olamilekan Adegbite, had, in an earlier interview with Vanguard, spoken gleefully about the push to get Ajaokuta working.

He had said: “It is good that we went to town then, it was something that was worth celebrating. The President went to Russia with a basket of requests, that was the Russia-African summit in Sochi in October (2019). On the sideline of that summit, we had a bilateral meeting with the Russian President.

“One of the requests tabled was for the Russians to come back and complete Ajaokuta, considering the fact that they built it in the first place, when they were in the Soviet Union. 

‘’It was essentially the Russians and the Ukrainians under the Soviet Union- it was a big country then, that built Ajaokuta, to about 95- 98 per cent completion.

“The request we made was we’ve tried some commercial arrangements to complete Ajaokuta in the past which have failed, so now we want to try a government-to-government arrangement. And President Putin acceded to that and promised that the Russian government would do it.

“The beauty of it is that we got funding, the Russian Export Centre, which is akin to what is called EXIM Bank in other countries, pledged a sum of $460million towards this project, while Afrexim Bank which is the bank that we are also shareholders, also pledged billion dollars.

“The beauty of it is that the money is not tied to Nigerian revenue. It is tied to revenue from that company. So Ajaokuta is beholden to pay back the money that is used to complete it. That is why this is a Build-Operate-Transfer. 

‘’It is the details we are going to work out, the kind of money it needs to be running. Ajaokuta is such that we do it properly. There’s a business case for that and it can pay for itself.’’

Buhari’s failed concession attempt

President Buhari who failed to privatise Ajaokuta in eight years, attempted to give it out in a concession arrangement a few months to the end of his government.

By doing so, he jettisoned the earlier arrangement with the Russians and AfreximBank in a move that drew heavy criticism.

There was no explanation from the government about the change of strategy and the concession advocates left too much in their haste to make Nigerians believe that the lack of transparency in that proposed deal was a scam.

Completing the steel company will give Nigeria a great relief in the current tight foreign exchange space as the export of its products will earn the nation huge forex, as well as save the huge foreign exchange currently spent in the importation of steel.

President Tinubu must be resolute to make Ajaokuta a dream come true because there had been a strong international conspiracy against that company as it would end decades of steel importation into Nigeria and other West African countries. 

Even multilateral organizations have tried to discourage the country from continuing with the plant, arguing that the Blast Furnace technology at the plant had become obsolete and should be turned into only a power plant. 

However, experts have argued that Blast Furnace remained relevant in steel production worldwide.

Tinubu’s moribund Ajaokuta campaign pledge

The revival of Ajaokuta was also a prominent promise during the 2023 presidential campaign.

While seeking the votes of Kogi State voters, then presidential candidate of All Progressives Congress, APC, now President Bola Tinubu, pledged to revive the Ajaokuta Steel Complex and develop the state’s mineral resources.

Speaking at an APC campaign rally in Lokoja, the Kogi State capital, Tinubu also promised to dredge the River Niger to facilitate shipping and inland water transportation to effectively support the steel industry logistics.

He stated: “Hope is here. Ajaokuta resuscitation will be done. Dredging of Niger River will be done. Agriculture will be the source of our prosperity. North Central has the potential for great mineral industrialisation; we will work on that.”

But three years into his administration, Ajaokuta remains largely idle, adding to a long list of unfulfilled promises surrounding the complex.

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