Over 90% of allocation goes to salaries, raising fresh questions over Nigeria’s stalled industrial flagship
The Federal Government has proposed a N6.04 billion personnel budget for the Ajaokuta Steel Company Limited (ASCL) in the 2026 fiscal year, despite the facility having produced no steel output for more than four decades since it was conceived.
Details contained in the 2026 Appropriation Bill show that the company was allocated a total of N6.69 billion, with staff-related expenses accounting for about 90.4 per cent of the entire budget, reinforcing Ajaokuta’s long-standing reputation as a non-performing public enterprise sustained largely by salary payments.
A breakdown of the personnel allocation shows N4.79 billion earmarked for salaries and wages, while N1.25 billion is set aside for allowances and statutory contributions. This includes N479.42 million for employer pension contributions, N239.71 million for National Health Insurance Scheme payments, and N59.82 million for employee compensation insurance. Regular allowances alone account for N468.9 million.
In contrast, overhead costs were limited to N233.63 million, while capital expenditure stood at just N410.8 million, highlighting the minimal funding directed at reviving production or completing the abandoned steel complex.
Capital Spending Falls Short
Less than seven per cent of Ajaokuta’s 2026 budget is dedicated to capital projects, with provisions including N56.4 million for fixed assets such as office equipment and security tools, N129.2 million for construction and facility provision, and N225.2 million for rehabilitation and repairs—mainly electricity and office-related works.
Analysts say these allocations fall far below what is required to restart a heavy industrial complex originally designed to anchor Nigeria’s steel and manufacturing value chain. Budget documents also show that the company is projected to generate zero independent revenue and receive no grants, leaving it fully dependent on federal funding.
Rising Salaries, Zero Output
While the 2026 personnel allocation is slightly lower than the N6.21 billion provided in 2025, it still confirms that staff remuneration remains the company’s top priority rather than steel production. In 2024, personnel costs stood at N4.29 billion, meaning recurrent spending has continued to rise despite prolonged inactivity.
Recurrent expenditure for 2026 totals N6.28 billion, compared to capital spending of N410.8 million, further underscoring the imbalance in spending priorities.
Constituency Projects, No Steel
Despite its dormant status, Ajaokuta continues to feature in constituency-style capital projects, including solar street lighting, water facilities, road repairs, security lighting, and grants to market women and youths in parts of Niger East and Kwara North. These projects, while ongoing, have no direct link to steel production or industrial output.
Separate Revival Funding Under Steel Ministry
Separately, the 2026 budget includes provisions under the Federal Ministry of Steel Development for the revitalisation of Ajaokuta and the National Iron Ore Mining Company (NIOMCO).
Budget documents show N150.99 million allocated for ongoing revitalisation works for both entities, as well as N1.06 billion earmarked for project preparation aimed at investment mobilisation for Ajaokuta. This includes funding for feasibility studies, Environmental and Social Impact Assessments, and financial modelling.
The 2026 project preparation allocation is lower than the N2.41 billion budgeted for the same purpose in 2025, while N250.98 million was also allocated last year for revitalisation efforts.
Decades of Delays
Conceived in 1979 as Nigeria’s flagship industrial project, the Ajaokuta Integrated Steel Complex was designed to reduce steel imports, drive industrialisation, and support economic diversification. By 1994, the project was estimated to be 98 per cent complete in terms of equipment installation, with 40 of its 43 planned units constructed.
Despite this, the project has remained unfinished due to mismanagement, policy reversals, and funding challenges.
Failed Revival Attempts
Efforts to revive the plant have repeatedly stalled. In 2019, Nigeria reached an agreement with Russia at the Russia–Africa Summit to revive Ajaokuta with support from Afreximbank and the Russian Export Centre, but the plan collapsed following the COVID-19 pandemic.
In January 2024, President Bola Tinubu opened discussions with Chinese firm Luan Steel Holding Group, but no concrete outcome has emerged.
Billions Paid in Salaries
The Federal Government paid N38.9 billion in salaries and allowances to Ajaokuta workers over a 10-year period. Between 2014 and 2024, N29.11 billion was budgeted for salaries and wages, while N9.8 billion went to staff allowances.
At a recent investigative hearing, Senator Natasha Akpoti-Uduaghan, representing Kogi Central, questioned the company’s sole administrator over claims that only a handful of workers were physically present at the complex despite billions allocated for personnel costs.
“I have made several unscheduled visits and could hardly find 10 people working there,” she said. “So who is collecting the salaries budgeted for thousands of workers?”
Calls for Privatization Persist
The Minister of Steel Development, Shuaibu Audu, has said the government needs over N35 billion to restart the Light Mill Section alone and between $2 billion and $5 billion to fully revive the complex within three years.
While the government has signed a Memorandum of Understanding with a Russian-led consortium for rehabilitation and operation, industry experts continue to argue that full privatisation remains the most viable path to unlocking Ajaokuta’s long-delayed potential.
