Ajaokuta Steel Drains ₦6.04bn in Wages in 2026 as Nigeria’s Industrial Revival Stalls
The Federal Government has proposed a N6.69 billion allocation for Ajaokuta Steel Company Limited in the 2026 fiscal year, once again highlighting the heavy fiscal cost of sustaining a non-operational industrial giant more than four decades after it was conceived.
Details of the 2026 Appropriation Bill show that personnel costs alone will gulp N6.04billion, representing about 90.4 per cent of the company’s total allocation.
Of this amount, N4.79billion is earmarked for salaries and wages, while N1.25billion is provided for allowances and statutory contributions, reinforcing Ajaokuta’s long-standing status as a payroll-driven public enterprise rather than a productive industrial asset.
A breakdown of the personnel vote shows pension contributions of N479.42m, National Health Insurance Scheme payments of N239.71million, and employees’ compensation insurance amounting to N59.82million. Regular allowances alone are estimated at N468.9million, underscoring the scale of recurrent obligations attached to a plant that has not produced steel.
The spending pattern reveals a sharp imbalance between recurrent and capital expenditure. Total recurrent spending is projected at N6.28billion, while capital expenditure is limited to just N410.8million, accounting for less than 7 per cent of the company’s total budget. This structure leaves little room for meaningful investment in physical assets, rehabilitation or production capacity.
Even the capital allocation is spread thinly across relatively minor items. Fixed asset purchases, including computers and security equipment, are allocated N56.4million, while construction and provision of facilities take N129.2million. Rehabilitation and repairs account for N225.2million, largely focused on electricity-related works and office buildings rather than core steel-making infrastructure.
The figures point to minimal effort directed at reviving a complex originally designed to anchor Nigeria’s steel and manufacturing value chain.
A review of recent budget trends suggests persistence rather than reform. Personnel costs rose sharply from N4.29billion in 2024 to N6.21billion in 2025, representing a 44.8 per cent increase despite the absence of production.
The proposed N6.04billion for 2026 reflects only a marginal 2.7 per cent year-on-year reduction, leaving the underlying spending structure unchanged, with salaries continuing to dominate and capital investment tightly constrained.
The budget also indicates that Ajaokuta Steel is expected to generate zero independent revenue in 2026 and will receive no grants, leaving it entirely dependent on federal subventions for survival.
Despite this, the company continues to be linked to constituency-style capital projects such as solar street lighting, water facilities, road repairs and community grants in parts of Niger and Kwara States. These expenditures are not tied to steel production or industrial capacity and do little to alter the company’s non-operational status.
Separately, the Federal Ministry of Steel Development has made limited provisions linked to Ajaokuta’s revival. In the 2026 budget, the ministry allocated N150.99m for revitalisation activities covering both Ajaokuta Steel Company Limited and the National Iron Ore Mining Company, alongside N1.06billion for project preparation aimed at investment mobilisation. These funds are earmarked for feasibility studies, environmental and social impact assessments and financial modelling, signalling continued emphasis on preparatory work rather than physical recommissioning.
Notably, these provisions mark a sharp decline from 2025, when N2.41bn was budgeted for project preparation and N250.98m for revitalisation. The reduction represents a 56 per cent year-on-year drop in preparatory spending, even as the steel complex remains idle.
Conceived in 1979 as Nigeria’s flagship industrial project, the Ajaokuta Integrated Steel Complex was expected to reduce steel imports, drive industrialisation and support economic diversification. More than 40 years later, the 2026 budget reinforces its role as a cost centre sustained largely by recurrent spending.
While the company says it employs about 3,000 workers and estimates that full commissioning could directly engage up to 10,000 staff, with upstream and downstream industries supporting as many as 500,000 jobs nationwide, current fiscal commitments show a steel plant kept alive by salaries, with revival still confined to studies and plans rather than steel output.
