Ajaokuta Steel Company in Kogi State
The dormant Ajaokuta Steel Company Limited (ASCL) incurs an annual cost exceeding N1 billion for pensions, salaries, taxes, and administrative expenses, despite being non-operational.
This was revealed by Prof. Linus Asuquo, Director-General of the National Metallurgical Development Centre, Jos, during a panel discussion at the inaugural National Steel Summit in Abuja on Thursday.
The session, titled “ _Analyzing the Policy Framework: Addressing Gaps and Strengthening Institutional Regulation,”_ highlighted critical issues facing the steel sector.
According to a 2024 BudgIT accountability report, ASCL’s financial strain has escalated, with approximately N1.11 billion expended over the past two years.
Prof. Asuquo identified key challenges, including significant financial losses, mismanagement, corruption, and a fragmented value chain infrastructure.
He noted that Nigeria has poured over $8 billion into the Ajaokuta project over four decades, yet persistent mismanagement, misallocated funds, and failed concession agreements with companies like Japan’s Kob Steel and India’s Global Steel Holdings Limited have stalled progress.
Asuquo pointed out that ASCL’s value chain is disrupted, as the iron ore mines at the National Iron Ore Mining Company (NIOMCO) in Itakpe, Kogi, remain non-functional. He added that the rail line meant to transport ore from Itakpe to Ajaokuta was delayed, vandalized, and only completed in 2020.
Furthermore, the plant’s outdated technology and degraded equipment lack modern, energy-efficient steelmaking capabilities.
He also highlighted unresolved community issues, noting that 13 villages displaced during the plant’s construction have yet to be adequately addressed.
To revive ASCL, Asuquo proposed rebuilding the integrated supply chain and adopting modern mini-mill technologies, such as compact strip production (CSP), which is cost-effective and quicker to implement compared to traditional blast furnaces.
He also advocated for private sector concessions, transferring management to strategic investors with proven expertise.
Additional recommendations included transforming ASCL into an industrial park and free trade zone, conducting Environmental and Social Impact Assessments (ESIA) to engage local communities, and fostering civil society involvement.
Asuquo emphasized the need for policy reforms, infrastructure upgrades, energy improvements, research and innovation, human capital development, raw material exploration, and sustainable financing.
“Reviving Nigeria’s steel assets is a national priority,” he stated.
“With political commitment, coherent policies, private sector partnerships, and consistent investment, the steel industry can drive industrialization and economic growth.”
The summit’s theme, “ _Rebuilding and Consolidating Nigeria’s Steel Industry: Collaborative Action for Sustainable Growth and Global Competitiveness,”_ underscored the urgency of these reforms.
