The Director-General of the National Metallurgical Development Centre, Prof. Linus Asuquo, has revealed that the non-functional Ajaokuta Steel Company Limited (ASCL) costs Nigeria more than ₦1 billion annually in salaries, pensions, taxes, and administrative expenses.
Prof. Asuquo made this disclosure during his presentation at the maiden edition of the National Steel Summit held on Thursday in Abuja. The panel discussion was titled “Dissecting the Current Policy Framework: Identifying Gaps and Building a Robust Institutional Regulation.”
According to a 2024 report by BudgIT’s accountability platform, Ajaokuta’s financial burden has steadily increased, with approximately ₦1.11 billion spent over the past two years alone.
The DG highlighted several key challenges facing the steel company, including significant financial strain, mismanagement, corruption, and a disconnected value chain infrastructure. He noted that Nigeria has invested over eight billion U.S. dollars into the Ajaokuta project over the past four decades.
“Persistent mismanagement and policy failures have derailed the project. Funds were misappropriated, and attempts at concessionaire agreements failed, as seen with the Japanese Kob Steel and India-based Global Steel Holdings Limited,” Asuquo stated.
He further explained that ASCL suffers from a disconnected value chain, as the iron ore mines at the National Iron Ore Mining Company (NIOMCO) in Itakpe, Kogi State, remain non-operational. The rail line intended for transporting ore from Itakpe to Ajaokuta was delayed and vandalised, only being completed and inaugurated in 2020.
Moreover, Asuquo pointed out that obsolete technology and degraded equipment have compounded the company’s woes, with most machinery deteriorated over decades and lacking modern, energy-efficient steel-making technology.
He also raised concerns about unresolved local community displacement, noting that 13 villages were displaced during the plant’s construction.
As a way forward, Asuquo recommended rebuilding the integrated supply chain and adopting modern mini-mill technologies. He advocated for a shift from large-scale blast furnaces to compact strip production — a more cost-effective, energy-efficient technology that can be rapidly built and operationalized.
Other proposals included embracing private sector concessions, transferring management from government to strategic private investors with proven expertise.
“The revival strategy should involve manufacturing rejuvenation, community and civil society engagement through Environmental and Social Impact Assessments,” he said. “The plant can also be repurposed as an industrial park and free trade zone.”
Asuquo emphasized that Nigeria’s legacy steel assets are largely underutilized and equipped with outdated machinery. Revitalizing these assets requires policy reforms, institutional restructuring, and strategic public-private partnerships.
Additional measures he suggested include infrastructure and energy upgrades, research and innovation, human capital development, raw materials exploration and processing, and sustainable financing mechanisms.
“Revitalising Nigeria’s legacy steel assets is a national imperative. With political will, coherent policies, private sector collaboration, and sustained investment, the steel sector can become a key driver of industrialization and economic transformation,” he concluded.
The summit’s theme was *Rebuilding and Consolidating Nigeria’s Steel Industry: Collaborative Action for Sustainable Growth and Global Competitiveness*.
