The Ajaokuta steel company briefly featured as a part of issues surrounding the sexual assault allegations levelled against the senate president by senator Natasha Akpoti-Uduagan, and her subsequent unjust suspension from the senate. It is clearly necessary for working people and all well-meaning citizens in the country to understand why this project which should have addressed the steel production needs of Nigeria has remained nothing but a rundown shell of what it should be.
The Ajaokuta Steel Company Limited, located in Ajaokuta, Kogi State, was one of the largest and most ambitious industrial projects undertaken in Nigeria. It was conceived during the 1970s, when state-led industrialisation and import substitution were at the heart of the ruling class’s developmental strategy for the accumulation of capital. It was to serve as the cornerstone of Nigeria’s industrial development by meeting the steel requirements for infrastructure, manufacturing, and more.
Contracts were signed with the Soviet Union and construction began. The facility was declared 98% complete in 1984. Decades later, the company has yet to produce steel commercially or in any significant quantity. What remains of the facility today is aging and broken down. It is now more of an idle infrastructure.
Despite the lack of productive use since its construction, the facility continues to incur costs in maintenance, staff salaries and pensions every year. This was up to the tune of N6.7b for the 2025 fiscal year alone. According to the Punch, Nigeria has spent over $8 billion on the facility in the last 40 years. Nigeria was also forced to pay $495 million to settle with and regain control of the facility from a private firm after a lengthy legal arbitration between 2007 and 2022, which crippled operations.
The government had given the facility as a concession to Global Steel Holdings Limited (GSHL) in return for expansionary investments and reviving production. GSHL failed to deliver, and the government proceeded to revoke the concession in 2007, leading to a long drawn arbitration. Nigeria lost money, and the plant was out of operation for almost 20 years.
Nigeria currently consumes about 7-10 million tonnes of steel every year and only about 2.1 million tonnes are produced locally in Nigeria. Most of that local production is from scrap metal, often resulting in low quality finished products, and billets imported from China that are reshaped and repurposed in local steel facilities. The remaining volume is imported directly. Nigeria has proven significant deposits of iron ore; about 3 billion tonnes. According to the Director General of the National Steel Raw Materials Exploration Agency (NSRMEA), Dr Umar Albarka Hassan, Nigeria currently has zero primary steel production from its iron ore deposits.
The Ajaokuta steel company stands as a symbol of the failure of Nigeria’s ruling class to deliver economic development and industrialisation. Steel is a fundamental material to drive a modern industrial economy. Failing to develop and maintain sufficient steel production capacity underscores the neocolonial nature of the Nigerian economy, where exports of raw materials and primary commodities are the mainstay while industrialisation takes a back seat. The ruling class in their usual corrupt fashion, have used white elephant projects like the Ajaokuta steel company to siphon off public funds, leaving them comatose, and the working people poorer.
Since the government regained control of the facility in 2022, there have been several announcements concerning the revitalisation of the facility and steel development. The Tinubu administration created the Federal Ministry of Steel Development in 2023 and signed a Memorandum of Understanding (MoU) with a Russian consortium that includes the original builders of the Ajaokuta plant, Messrs Tyazhpromexport and others. However, awarding contracts and signing MoUs are not the same as having the institutional discipline and tenacity required to pool resources and execute industrial policy on the scale required to ensure steel development and production.
While the capitalist class in Nigeria desires to increase the productive forces to enable them to accumulate more capital, the very nature of Nigeria’s neocolonial political and economic reality – their subservience to international capital; institutional corruption and instability – prevents them from engaging in risky long-term investments that results in industrialisation and substantive economic development.
In countries like Nigeria, where the state is the central vehicle for private wealth accumulation, access to state power becomes paramount for the ruling class. More time and resources are spent on permutations and manipulations to win the sham liberal democratic elections they hold, than on national development. This locks the ruling class’s dependence on primary commodity exports to run the state machinery.
We can observe the tension of this contradiction expressed in plans, announcements and jingoes about diversifying the economy and industrialisation, while at the same time, the underlying economic fundamentals remain the same. However, despite this apparent contradiction, the local elites as a class, are happy with the status quo. The underdevelopment of the economy does not inhibit the expansion of their wealth base; through corruption and commerce. As socialists, our duty is to help build working people’s power as an alternative to the power of the rich few that oppress us. We must fight against calls for neoliberal privatization, where national wealth is formally and completely transferred to private hands. Our struggle must be aimed at the revolutionary overthrow of this degenerate ruling class and the neocolonial capitalist system they represent. We, the working-class people, have to take political power that will enable us to seize hold of the means of production, including the Ajaokuta steel company, and use these to better our lives and build a better society.
by Blessing OGHOGHO
