Nigeria’s ₦1 Trillion Steel Import Bill Exposes the Cost of Keeping Ajaokuta Idle

Nigeria’s dependence on imported steel is becoming an increasingly expensive burden on the economy, with official trade data showing that the country spent more than ₦1 trillion on iron and steel imports in 2025.

The figure highlights a long-standing contradiction in Nigeria’s industrial policy: while the country continues to spend heavily on imported steel products, its flagship steel project, the Ajaokuta Steel Complex in Kogi State, has remained largely inactive for more than four decades.

The economic consequences extend beyond the import bill. A weak domestic steel industry means lost manufacturing opportunities, reduced value addition to locally mined minerals, pressure on foreign exchange and fewer opportunities to develop industries that depend on affordable steel.

Nigeria’s steel import bill jumps above ₦1 trillion

Data from the National Bureau of Statistics (NBS) indicate that Nigeria’s iron and steel imports averaged roughly ₦526 billion annually over the six years preceding 2025.

In 2025, however, the recorded value moved above the ₦1 trillion mark.

The official figures cover recorded international trade and therefore may not represent the full volume of steel entering the country through informal channels or transactions that are not captured in official statistics.

The scale becomes even more significant when compared with an estimate attributed to the Minister of Steel Development, Shuaibu Abubakar Audu, who has put Nigeria’s annual expenditure on iron and steel imports at about $4 billion.

The difference between the official trade figures and broader industry estimates is important because it demonstrates that Nigeria’s steel challenge is not simply about one abandoned industrial project. It is part of a much larger supply-chain problem affecting construction, manufacturing, infrastructure and other productive sectors.

Why steel matters to Nigeria’s industrial future

Steel is a fundamental input for modern economies.

It is used in the construction of buildings, bridges, roads and rail infrastructure, while manufacturers rely on steel for machinery, equipment, vehicles, fabrication and industrial components.

A country that cannot produce enough steel domestically must either import finished products or depend on foreign suppliers for critical industrial inputs.

That creates additional exposure to exchange-rate movements, international commodity prices, shipping costs and global supply disruptions.

For Nigeria, the problem is particularly significant because the country possesses substantial mineral resources and has spent decades attempting to establish an integrated steel industry.

Ajaokuta was designed to be more than a steel plant

The Ajaokuta Steel Complex was conceived as an integrated metallurgical facility capable of producing up to 5.2 million tonnes of liquid and finished steel products annually when fully developed.

Its planned product range included structural steel, bars, wire rods, plates and flat products, among other industrial outputs.

The project was also expected to support a much broader industrial ecosystem.

If operating at meaningful capacity, Ajaokuta could create demand for mining, transportation, engineering, fabrication and other supporting businesses. Steel production could also supply downstream industries involved in construction, automobile manufacturing, machinery and infrastructure development.

That potential is why the continuing inactivity of the complex carries a cost that cannot be measured only by the money already spent constructing it.

Every year of inactivity represents another year in which Nigeria imports products that could potentially be produced domestically.

Nigeria’s unusual industrial contradiction

One of the central problems identified by steel-sector stakeholders is the country’s position within the mineral value chain.

Nigeria has mineral resources that can serve as inputs for industrial production, yet much of the country’s economic activity remains concentrated on exporting raw or minimally processed resources and importing finished or semi-finished products.

Oyabugbe Sunday, President of the National Association of Steel Workers, argued that this pattern undermines domestic value addition and increases foreign-exchange outflows.

Industry estimates, he said, place Nigeria’s annual steel import bill at around $4 billion, although the actual figure varies according to international prices and import volumes.

This creates what could be described as a double economic loss: Nigeria loses the opportunity to process more of its resources locally while simultaneously paying foreign suppliers for finished products.

How Ajaokuta became trapped in decades of failed revival efforts

The story of Ajaokuta is also a story of repeated attempts to solve the same problem.

The federal government has explored several concession and investment arrangements over the years, but successive efforts have been disrupted by disagreements, allegations, legal disputes and changes in government policy.

2003: SOLGAS concession

In June 2003, the federal government entered a 10-year concession agreement with SOLGAS Energy Limited, an American company, to rehabilitate, complete, commission and operate the complex.

The arrangement did not last.

The government terminated the concession in 2004 after the company failed to meet its obligations.

2004–2008: Global Steel dispute

The government subsequently entered another concession arrangement involving Global Infrastructure Nigeria Limited (GINL), associated with Indian businessman Pramod Mittal’s Global Steel Holdings.

The arrangement became highly controversial.

In 2007, the concession was converted into a share-sale arrangement under which the government agreed to transfer a 60 percent interest in Ajaokuta Steel Company to GINL for $525 million.

The Yar’Adua administration later reviewed the arrangement and terminated the concession in 2008 following an investigation that raised concerns including alleged asset stripping and failure to provide the required financing.

GINL challenged the government’s decision through international arbitration in London.

The resulting dispute remained a major obstacle to resolving Ajaokuta’s ownership and investment questions for years.

Nigeria eventually paid $496 million to settle the dispute

The legal dispute continued across subsequent administrations before the federal government under President Muhammadu Buhari agreed to an out-of-court settlement.

Nigeria ultimately paid about $496 million as part of the negotiated settlement, according to the account supplied for this report, bringing the long-running dispute to an end and allowing the country to fully reclaim the complex.

The episode illustrates one of Ajaokuta’s biggest structural problems: each failed attempt at rehabilitation has had consequences that extend far beyond the immediate project.

Legal disputes, policy reversals and uncertainty over ownership can make a major industrial asset difficult to finance or operate, particularly when potential investors cannot determine what framework will remain in place after a change of government.

The Russian proposal offered another opportunity

Another major attempt to restart the complex emerged after the Russia-Africa Summit in Sochi in October 2019.

The Nigerian government announced that Russia was prepared to support the completion of Ajaokuta through financing and technical assistance, drawing on the expertise of the Russian side, which was involved in the original construction of the complex during the Soviet era.

The proposed financing included about $460 million from the Russian Export Centre, while the African Export-Import Bank, Afreximbank, was reported to have been prepared to provide approximately $1 billion toward the project.

The proposed structure was particularly significant because it was intended to reduce dependence on direct Nigerian budget financing, with repayment expected to come from the future operation of the steel complex.

But the arrangement did not translate into a completed revival before the Buhari administration left office.

Presidential implementation team also failed to deliver

In May 2020, the Buhari administration established the Ajaokuta Presidential Project Implementation Team (APPIT) to accelerate the process of completing and restarting the complex.

The government acknowledged at the time that previous attempts had failed and that the prolonged inactivity of Ajaokuta was contributing to foreign-exchange losses and lost industrial opportunities.

APPIT was expected to help coordinate the technical, financial and contractual processes required to move the project toward completion.

However, the project again failed to reach the point of full commercial operation before the administration ended.

Claims contained in the source material allege that internal disagreements and potential conflicts of interest within the implementation process contributed to delays. Those allegations should be treated as allegations unless independently established through official investigations or documentary evidence.

Tinubu inherited both an industrial asset and an unfinished promise

Ajaokuta was also part of President Bola Ahmed Tinubu’s 2023 campaign message.

During an APC campaign rally in Lokoja, Tinubu promised that his administration would revive the complex and develop Kogi State’s mineral resources.

He also linked the project to the proposed dredging of the River Niger, arguing that improved inland transportation could support the movement of materials and finished products associated with the steel industry.

Three years into the Tinubu administration, however, the central question remains unresolved: when will Ajaokuta become a commercially functioning steel producer?

That question is becoming more urgent as Nigeria continues to face pressure on foreign exchange and seeks to reduce dependence on imported manufactured goods.

What restarting Ajaokuta could mean for Nigeria

The argument for reviving Ajaokuta is not simply about bringing an old government project back to life.

A successful steel industry could potentially anchor a wider industrial cluster.

Mining companies would have a larger domestic market for relevant raw materials. Engineering companies could participate in maintenance and production. Manufacturers could source more inputs locally. Transport operators would benefit from increased movement of industrial materials, while construction and fabrication businesses could gain access to a more stable domestic supply.

The complex could also contribute to government revenue and export earnings if production eventually exceeds domestic demand.

The employment effect could extend beyond the plant itself, particularly if downstream industries emerge around domestic steel production.

But revival must go beyond government announcements

The history of Ajaokuta demonstrates that securing an investment announcement is not the same thing as building a functioning industrial enterprise.

A sustainable revival would require several elements to work simultaneously:

• a technically credible rehabilitation plan;
• transparent procurement and contracting;
• reliable financing;
• professional management;
• protection against political interference;
• clear ownership and concession arrangements;
• dependable power and logistics;
• access to appropriate raw materials;
• strong downstream demand; and
• a long-term policy framework that survives changes in administration.

There is also an important technical question surrounding the existing technology and what parts of the plant require rehabilitation, replacement or modernization. That assessment should be based on a transparent, independent technical audit rather than political claims from either supporters or opponents of the project.

The bigger issue is Nigeria’s industrial value chain

Nigeria’s steel problem ultimately goes beyond Ajaokuta.

Even a successfully rehabilitated Ajaokuta would need functioning mines, transportation networks, reliable energy, industrial customers and a competitive business environment to become the foundation for large-scale industrialisation.

The real measure of success, therefore, should not be another commissioning ceremony or government announcement.

It should be whether Nigeria can gradually move from importing large quantities of finished steel to producing more of what its own industries require, while developing the capacity to export competitively.

For a country spending more than ₦1 trillion a year on recorded iron and steel imports, the economic stakes are substantial.

Ajaokuta has remained a symbol of Nigeria’s unfinished industrial ambition for more than 40 years. The latest import figures make the cost of that unfinished ambition harder to ignore.

The next test for the Tinubu administration will be whether it can turn another promise to revive the complex into a transparent, commercially viable and sustainable steel industry—and ultimately reduce Nigeria’s dependence on imported steel.