AJAOKUTA STEEL REVIVAL DEAL WITH CHINESE INVESTOR SET FOR COMPLETION BY END-2026
By PRESSCODE NEWS
ABUJA, NIGERIA. THURSDAY, 9 JULY 2026
The Federal Government of Nigeria has confirmed that a formal agreement with a Chinese investor for the rehabilitation of the Ajaokuta Steel Company is expected to be finalised before the end of 2026. The Minister of Steel Development, Shuaibu Abubakar Audu, disclosed this during an appearance on the NTA programme Good Morning Nigeria, stating that negotiations covering capital injection and technical modernisation are at an advanced stage.
The proposed revival framework is estimated to require between $1.5 billion and $2 billion in private sector funding, reflecting the government’s limited fiscal capacity. As part of preparatory measures, the Ministry of Steel Development has initiated a comprehensive technical audit to assess the plant’s structural condition and define upgrade requirements. In parallel, a 20-year Gas Sale and Purchase Agreement has been secured with the Nigerian National Petroleum Company (NNPC) Limited, alongside plans to develop five mini-LNG plants within the complex to guarantee stable energy supply.
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The strategy also involves cross-sector institutional collaboration aimed at improving operational viability. The ministry has signed a Memorandum of Understanding with the Ministry of Defence and the Defence Industries Corporation of Nigeria (DICON) to repurpose sections of the facility for defence manufacturing, including light arms and protective equipment. NNPC Limited is further positioned to anchor approximately $500 million in foreign direct investment linked to the LNG infrastructure, reinforcing the project’s commercial and regional energy distribution potential.
Despite these developments, Ajaokuta Steel Company remains non-operational, having failed to produce liquid steel since its establishment in 1979. Budgetary provisions in the 2026 Appropriation Bill allocate N6.69 billion to the company, with approximately 90.4 per cent—equivalent to N6.04 billion—designated for personnel costs. This underscores the ongoing financial burden of maintaining an inactive workforce, while longstanding challenges including legal disputes, administrative inefficiencies, and previous failed concession attempts continue to shape scepticism around the project’s execution prospects.
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The anticipated agreement reflects a broader policy shift towards public-private partnerships in addressing Nigeria’s industrial infrastructure gaps. However, the persistent allocation of significant public funds to sustain a non-performing asset highlights enduring structural inefficiencies within state-owned enterprises. While the integration of energy and defence-linked utilisation introduces a more pragmatic operational model, the credibility of the initiative will ultimately depend on execution discipline, regulatory clarity, and the government’s ability to avoid the historical cycle of stalled reforms that has defined Ajaokuta for over four decades.
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(DEMOCRACY NEWSLINE NEWSPAPER, JULY 10TH 2026)
