Ajaokuta Debate Returns as Experts Urge Hard Economic Choices on Nigeria’s Steel Future

The Ajaokuta Steel Complex has again returned to the centre of Nigeria’s industrial debate, with analysts warning that decades of political promises have not translated into commercial steel production. Built as a flagship project in the 1970s and long presented as a strategic national asset, the plant still has not produced steel at commercial scale despite repeated interventions and heavy public spending.

At the heart of the renewed argument is a basic economic question: should Nigeria continue funding a large legacy facility that has remained inactive, or should it redirect capital to newer and more viable steel models? The latest commentary describes Ajaokuta as a symbol of the country’s wider governance problem — big ambition, weak execution and limited accountability.

A project designed to anchor industrialisation

Ajaokuta was designed to be Africa’s biggest integrated steel facility, with Soviet technical support and Nigerian state backing. The long-term plan covered billets for construction, flat products for manufacturing and wider support for domestic industrial growth. Infrastructure including blast furnaces, rolling mills and support units was built over time.

However, the complex never reached sustained operations. Key structural constraints persisted: inconsistent iron ore feedstock from Itakpe, weak logistics around the rail connection to Warri port, and the operational discipline required to run blast furnaces continuously. Without those links functioning together, experts say the plant cannot deliver output at the scale needed to justify its cost profile.

Kalu Aja, who has visited the site, captured the mood in direct terms: “No Nigerian can visit Ajaokuta, see investments of more than $8bn rotting in the African sun, and not cry.”

Policy reversals across administrations

The article traces how successive governments approached Ajaokuta differently, often reversing earlier decisions.

Former President Olusegun Obasanjo pursued concession efforts, arguing that state control alone was not enough to make the project commercially viable. Under Umaru Yar’Adua, some of those moves were rolled back, including revocation of the prior sale process. The piece argues that this reversal weakened continuity in industrial policy.

Goodluck Jonathan did not place Ajaokuta at the centre of his economic programme, while Muhammadu Buhari later moved to reclaim concessions, with nearly $500 million spent in buyback efforts according to the report. Critics contend these cycles have produced cost without measurable output.

The result is a repeated pattern: Ajaokuta remains politically visible but commercially unresolved. Leaders frame revival as a patriotic obligation, yet few present transparent, testable return metrics.

Asset or liability?

Using investor language, the article cites Robert Kiyosaki’s test that an asset should put money in one’s pocket. On that standard, the writer argues Ajaokuta has behaved more like a fiscal liability than a productive asset, consuming public resources that might otherwise have gone to power, roads or modern smaller-scale steel investments.

This has split policy observers into two camps.

One group says steel capacity is strategic and should be preserved. They argue local production can reduce import dependence, support jobs and stimulate construction and manufacturing value chains.

The second camp says the current plant design is outdated and that reviving the full Soviet-era model may no longer be the most efficient path. In that view, modular mini-mills and direct-reduction facilities are better aligned with current global industry realities, lower capex pathways and faster commissioning cycles.

The report notes that Aliko Dangote has publicly taken a sceptical position, stating: “Ajaokuta will not work.”

International comparisons and execution gap

The commentary compares Nigeria’s choices with countries that also had state-linked steel ambitions but adapted through discipline and restructuring.

India combined public steel institutions with aggressive private execution and modernisation, while shutting or restructuring underperforming assets where needed. South Korea built POSCO with integrated planning around ore access, power reliability and export strategy. China scaled integrated hubs but also adapted rapidly to changing technologies.

The central claim is not that those countries had easier conditions, but that they sustained execution discipline and aligned policy with operational realities. Nigeria, the piece argues, has often kept Ajaokuta alive in rhetoric while avoiding hard decisions about cost, technology fit and governance structure.

Three non-negotiables before operations

Kalu Aja identifies three minimum conditions for any meaningful restart: reliable Itakpe iron ore supply through NIOMCO, efficient freight movement on the Itakpe–Ajaokuta–Warri rail corridor, and stable continuous blast-furnace operations backed by uninterrupted power and feedstock. Without these, restarting the plant would likely increase losses rather than deliver output.

For policymakers, this is the practical bottleneck: steelmaking at integrated-plant scale depends on tightly coordinated upstream and downstream systems. Partial fixes do not solve the core economics.

What a realistic roadmap could look like

Rather than broad political pledges, the article recommends a phased and transparent strategy.

First, depoliticise decision-making with an independent technical and financial audit published for public scrutiny.

Second, begin with narrower operational targets, such as restoring the light rolling mill and testing domestic demand in products like rebar before attempting full integrated production.

Third, structure any concession with enforceable milestones, clear penalties for missed delivery and escrow-backed obligations.

Fourth, open space for private-led greenfield investments using modern technology stacks that may deliver lower risk and shorter timelines than full legacy rehabilitation.

Fifth, coordinate demand-side policy so that domestic steel output has bankable offtake, particularly through construction, rail and public procurement pipelines.

The urgency is heightened by import pressure. Nigeria reportedly spends more than $4 billion yearly on steel and related imports, a major outflow that weakens local industrial multipliers. Yet the article insists that import substitution must be pursued through commercially viable systems, not symbolism.

A national decision point

The broader warning is that Ajaokuta has become a mirror for the country’s policy culture: high rhetoric, weak delivery and repeated fiscal exposure. The writer argues that industrialisation will not come from sentiment alone but from measurable outputs, disciplined governance and investment choices that match present-day technology and market dynamics.

That leaves Nigeria with two difficult but necessary options: rebuild Ajaokuta only on strict technical and commercial terms, or formally close the chapter and channel resources into modern alternatives that can produce steel competitively.

Either route requires honesty about sunk costs and future obligations. What is no longer sustainable, the article concludes, is another cycle of promises without production.

The piece was written by Mohammed Basah, founder of Ideas Foundry Limited and Entrepreneurship Tonic, who says the long-running Ajaokuta debate should now be settled by evidence, not nostalgia.