Nigeria’s dependence on imported steel is putting significant pressure on the country’s foreign exchange resources, with official data showing that the nation spent more than N1 trillion importing iron and steel products in 2025.

The development is particularly concerning given Nigeria’s long-standing efforts to revive the Ajaokuta Steel Complex in Kogi State, a major industrial project that has remained largely inactive for more than four decades despite its vast production potential.

Data from the National Bureau of Statistics (NBS) indicate that Nigeria’s iron and steel imports averaged about N526 billion annually over the six-year period preceding 2025.

However, the import bill rose above N1 trillion last year. The NBS figures represent officially recorded imports and may not fully account for products entering the country through informal channels or cases of under-reporting.

The Minister of Steel Development, Prince Shuaibu Abubakar Audu, has placed the annual cost of Nigeria’s steel imports even higher, estimating that the country spends about $4 billion, equivalent to roughly N5.6 trillion, on imported iron and steel products each year.

Ajaokuta’s Untapped Industrial Potential

The Ajaokuta Steel Complex was originally conceived as an integrated steel plant with the capacity to produce up to 5.2 million tonnes of liquid and finished steel annually.

Its planned production range included structural steel, wire rods, bars, heavy plates and flat sheets, as well as other industrial by-products.

Beyond supplying Nigeria’s domestic market, the complex was intended to serve neighbouring West African countries and eventually expand its reach into other African markets.

If successfully revived, Ajaokuta could support large-scale industrialisation by supplying essential materials to construction, manufacturing, transportation, engineering and defence industries.

The plant could also generate substantial employment across mining, manufacturing, engineering, logistics and construction while helping Nigeria reduce its dependence on imported steel and conserve foreign exchange.

Labour Raises Concern Over Raw Material Exports

President of the National Association of Steel Workers, Oyabugbe Sunday, said Nigeria’s current economic pattern remains counterproductive because the country exports raw materials while importing finished steel products.

According to him, the practice deprives Nigeria of opportunities for domestic value addition and limits the country’s industrial growth.

He noted that industry estimates put Nigeria’s annual steel import expenditure at around $4 billion, although the exact figure changes depending on international steel prices and import volumes.

Oyabugbe also said previous assessments of Ajaokuta indicated that the facility was about 95 per cent complete and could require approximately $1.5 billion to become operational.

Failed Attempts to Revive Ajaokuta

Nigeria’s attempts to bring Ajaokuta back into production have been marked by a series of unsuccessful concessions, controversies and prolonged legal disputes.

One of the earliest major efforts came in 2003, when the Federal Government granted SOLGAS Energy Limited a 10-year concession to rehabilitate, complete and operate the complex.

The arrangement was terminated in 2004 after the company reportedly failed to meet its obligations.

The government subsequently entered another concession arrangement in 2004 with Global Infrastructure Nigeria Limited (GINL), associated with Indian businessman Pramod Mittal.

That deal also became controversial and eventually collapsed. In 2007, the government moved to transfer a 60 per cent stake in Ajaokuta to GINL for $525 million.

The arrangement was later scrutinised by the administration of former President Umaru Musa Yar’Adua following allegations of breaches, including claims of asset stripping and inadequate investment.

The concession was terminated in 2008, after which the dispute moved to international arbitration in London. The legal battle continued through subsequent administrations.

Eventually, the Federal Government reached an out-of-court settlement with the Indian company during the administration of former President Muhammadu Buhari, reportedly paying $496 million to resolve the dispute and regain full control of the complex.

Russian Support Also Failed to Materialise

Another major attempt emerged after the 2019 Russia-Africa Summit in Sochi, where Russia indicated its willingness to provide financial and technical support for the completion of Ajaokuta.

The Russian Export Centre reportedly pledged $460 million, while the African Export-Import Bank (Afreximbank) indicated it could provide an additional $1 billion.

The proposed arrangement was designed to provide funding and technical expertise without placing the repayment burden directly on Nigeria’s general revenues.

However, the agreement was not concluded before the Buhari administration left office, leaving another proposed route for completing the plant unrealised.

The Federal Government had also established the Ajaokuta Presidential Project Implementation Team in 2020 to accelerate efforts to revive the complex.

The initiative, however, reportedly made limited progress amid allegations of conflicts of interest involving some members of the implementation team.

Tinubu’s Ajaokuta Promise

The revival of Ajaokuta was also part of President Bola Tinubu’s campaign promises ahead of the 2023 presidential election.

During a campaign rally in Lokoja, Kogi State, Tinubu promised to revive the steel complex and develop the state’s mineral resources.

He also pledged to dredge the River Niger to improve transportation and support logistics for the steel industry.

However, three years into his administration, the Ajaokuta complex remains largely inactive.

The continued dependence on imported steel has therefore renewed calls for the government to take decisive steps toward completing and operationalising the plant.

A functional domestic steel industry could reduce Nigeria’s import burden, preserve scarce foreign exchange, create jobs and provide essential inputs for construction, manufacturing, rail development, automobile production and other strategic industries.

For a country seeking to strengthen local production and reduce its dependence on imports, the long-delayed revival of Ajaokuta remains a major industrial challenge.