FG budgets N6.04bn payroll for idle Ajaokuta steel
The Federal Government has proposed to spend N6.04bn on personnel costs for workers of the Ajaokuta Steel Company Limited in the 2026 budget, even though the steel plant has not produced a single sheet of steel for more than four decades after it was conceived.
Details from the 2026 Appropriation Bill show that Ajaokuta was allocated a total of N6.69bn for the year, with personnel expenses alone accounting for N6.04bn, or about 90.4 per cent of the entire allocation.
This reinforces the company’s long-standing status as a non-performing public enterprise sustained almost entirely by salary payments.
The personnel cost provision covers N4.79bn for salaries and wages, N1.25bn for allowances and social contributions, including N479.42m for employer pension contributions, N239.71m for NHIS, and N59.82m for employees’ compensation insurance. Regular allowances alone were budgeted at N468.9m.
In comparison, overhead costs were limited to N233.63m, while capital expenditure stood at just N410.8m, highlighting the minimal resources directed towards reviving production or completing the long-abandoned steel complex.
A year-on-year review shows that while personnel spending remains elevated, it represents a marginal adjustment from previous years rather than a structural shift.
In the 2025 budget, the Federal Government earmarked N6.21bn for salaries at Ajaokuta, up from N4.29bn in 2024, despite the company’s continued inactivity. That 2025 allocation marked a 44.76 per cent increase, showing how recurrent spending on the firm has continued to rise independently of output.
Although the 2026 personnel figure of N6.04bn is slightly below the 2025 salary-heavy provision, it still confirms that Ajaokuta’s core budget priority remains staff remuneration rather than steel production.
Recurrent expenditure for 2026 totals N6.28bn, compared with capital spending of N410.8m, meaning less than seven per cent of the company’s allocation is devoted to assets, rehabilitation, or infrastructure.
The capital budget includes N56.4m for fixed asset purchases, such as computers, printers and security equipment, N129.2m for construction and provision of facilities, and N225.2m for rehabilitation and repairs, largely for electricity-related works and office buildings.
These provisions fall far short of what would be required to revive a heavy industrial complex designed to anchor Nigeria’s steel and manufacturing value chain. Budget documents also show that Ajaokuta will generate zero independent revenue and receive no grants, leaving the company fully dependent on federal allocations.
Despite its non-operational status, the company continues to feature in constituency-style capital projects, including solar street lighting in parts of Niger East and Kwara North, water facilities, road repairs, security lighting, and grants to market women and youths. These projects, though ongoing, are not linked to steel production or industrial output.
However, the 2026 budget also makes a separate provision for the revitalisation of Ajaokuta Steel Company Limited and the National Iron Ore Mining Company under the Federal Ministry of Steel Development.
Budget documents show that N150.99m was allocated for the revitalisation programme of ASCL and NIOMCO, classified as an ongoing project within the ministry’s capital expenditure for the year.
Also, the 2026 budget shows N1.06bn was allocated for project preparation aimed at investment mobilisation for Ajaokuta Steel Company Limited under the ministry. The amount is for feasibility studies, Environmental and Social Impact Assessment, and financial modelling for Ajaokuta, signalling continued preparatory spending on revival plans even as the steel complex itself remains non-operational.
The total amount for 2026 is lower than what was budgeted in 2025, as The PUNCH earlier reported that the Ministry of Steel Development planned to spend N2.41bn on project preparation for investment mobilisation for Ajaokuta Steel Company Limited in 2025.
The ministry also budgeted N250.98m to revitalise Ajaokuta Steel Company Limited and the National Iron Ore Mining Company in the 2025 proposed budget.
Conceived in 1979 as Nigeria’s flagship industrial project, the Ajaokuta Integrated Steel Complex was designed to drive upstream and downstream industrial development, reduce steel imports, and support economic diversification.
More than 40 years later, budgetary allocations show it functions largely as a payroll institution, with successive governments funding salaries while production remains at zero.
On its website, the company claimed it employed about 3,000 people. It added, “While the project would directly employ about 10,000 staff at the first phase of commissioning, the upstream and downstream industries that will evolve all over the nation will engage not less than 500,000 employees.”
Ajaokuta Steel Plant, aptly known as the bedrock of Nigeria’s industrialisation, is more than just a rolling mill—it’s an Integrated Iron and Steel Plant. It boasts four distinct rolling mills: the Billet Mill, the Light Section Mill, the Wire Rod Mill, and the Medium Section and Structural Mill.
The plant utilises blast furnace technology, the most prevalent method of steel production, accounting for about 70 per cent of global liquid steel production. By 1994, the plant was estimated to be 98 per cent complete in terms of equipment installation.
While some units of the plant were operational at various times, 40 out of the 43 planned units had been constructed. However, due to mismanagement, the project remains incomplete over 45 years later.
At the Russia-Africa Summit in 2019, former President Muhammadu Buhari and Russian President Vladimir Putin agreed to revitalise the steel mill with Russian support and project funding from Afreximbank and the Russian Export Centre. However, it was delayed due to the COVID-19 pandemic, and the agreement was abandoned.
In January 2024, President Bola Tinubu began discussions with the Chinese steel company Luan Steel Holding Group to revive the Ajaokuta Steel Company. That discussion has not yielded any results so far. Despite its inactive status and reports of an ineffective workforce, the company continues to receive substantial annual budget allocations from the government.
The PUNCH earlier reported that the Federal Government paid workers of the moribund Ajaokuta Steel Company a total of N38.9bn in salaries and allowances over 10 years. A breakdown of the company’s annual budget from 2014 to 2024 showed that a total of N29.11bn was budgeted for salaries and wages, and N9.8bn for staff allowances.
Further analysis revealed that the government budgeted N3.82bn for personnel costs in 2014, which was reduced marginally to N3.8bn in 2015, N3.55bn in 2016, and N3.84bn in 2017. In 2018, an unverifiable number of workers at the company were allocated a total sum of N3.76bn for salaries and allowances, N3.2bn in 2019, and N3.5bn in 2020.
The cost increased to N3.89bn in 2021 and N3.94bn in 2022 but dropped significantly to N1.22bn in 2023.
At an investigative hearing recently, the lawmaker representing Kogi Central, Senator Natasha Akpoti-Uduaghan, questioned the Sole Administrator of the Steel Company, Summaila Akaba, about several workers collecting salaries from the N4.2bn appropriated for personnel costs in the 2024 budget.
She said that, being an indigene of the area and desirous of getting the steel company revamped and operational, she made unscheduled visits to it and found only 10 people there.
The lawmaker lamented further that, despite spending on personnel costs, no steel had been manufactured and no mill had rolled.
She said, “The sum of N4.2bn was appropriated for personnel cost in 2024, but from several visits I’ve made to the complex, hardly 10 people were sighted to be around or doing anything. So, who are the workers collecting monthly salaries from the appropriated N4.2bn?”
In the 2024 budget, the National Assembly increased budgetary allocation from N4.45bn in the proposed 2024 budget to N5.18bn in the approved version for the dormant Ajaokuta Steel Company.
This is an increase of N730m as the Federal Government plans to revive the moribund steel plant, which has been dormant for over 42 years. Saturday PUNCH observed that the increase was due to the addition of community projects not related to the steel plant and outside Kogi state.
At a briefing in 2024, the Minister of Steel Development, Shuaibu Audu, stated that the government was at an advanced stage of raising more than N35bn required to restart the Light Mill Section of the Ajaokuta Steel Company.
He also said that data from technical analysis and expert evaluations indicated that the government would require between $2bn and $5bn to revive the Ajaokuta steel company within three years.
The Federal Government of Nigeria, through the Ministry of Steel Development, also signed a Memorandum of Understanding with a Russian consortium for the rehabilitation, completion, and operation of the Ajaokuta Steel Company Limited and the National Iron Ore Mining Company.
The consortium, including Messrs Tyazhpromexport, Novostal M, and Proforce Manufacturing Limited, will spearhead the project to revitalise the steel industry in Kogi State. However, experts earlier insisted that the best option was to privatise the company to effectively maximise its potential.
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