Despite its potential and ability to catalyse industrialisation on a massive scale, the steel sector has languished in decay. Yet, stakeholders remain upbeat that hope abounds in unfulfilled promises of revitalisation through privatisation or concession, TOBI AWODIPE reports.

Last week, the Federal Government, amidst pomp and applause, held an inaugural stakeholders’ summit on the development of the steel sector.The move is seen as another step taken to revive the comatose sector, which has been identified as the heartbeat of Nigeria’s industrialisation.
 
At the summit, promises were made to, again, revive the Ajaokuta Steel Company, the Aluminium Smelter Company of Nigeria, the National Iron Ore Mining Company and the Delta Steel Company (now called Premium Steel and Mines), among others.
 
The President revealed that a memorandum of understanding (MoU) has again been signed with Tyazhpromexport (TPE) and the consortium “to rehabilitate and operate the Ajaokuta Steel Plant and the National Iron Ore Mining Company in Itakpe”.
  
“We have also engaged other proposals from China and additional partners, and a final decision is under careful review. A technical and financial audit of Ajaokuta, approved by the Bureau of Public Procurement (BPP), is currently ongoing and will inform our next steps and shape investor selection,” it stated.
  
This is not the first time promises have been made to revive Ajaokuta and the other steel companies. Every successive administration had made similar promises, which failed to see the light of day. It was not just promises that glaringly failed, but billions of naira also went down the drain.
 
In 1980, former President Shehu Shagari laid the foundation stone of an integrated steel plant in Ajaokuta on 24,000 hectares of sprawling green-field landmass, built on 800 hectares. About 45 years later, over $10 billion, after several concessions, governments and endless promises, Ajaokuta has failed to produce a single bar, rod or coil. This fact has, however, not stopped any administration from continuing the historical waste, as each successive one promised to revive it with nothing to show.
 
Beyond Ajaokuta, President Tinubu also said there are efforts being made to revive the Aluminium Smelter Company of Nigeria in Ikot-Abasi, which he said had been stalled by long-standing legal and operational hurdles. To this end, a new investment proposal of a whopping $465 million has been submitted by its current management.
  
The President also said the management of Premium Steel and Mines claimed it will begin rehabilitation and operations within 18 months, depending on the availability of raw materials. DSC managed to operate for just a little over a decade and was forced to close down due to unbridled and rampant corruption by its managers.
 
“We have also attracted a new project by Stellar Steel, part of the Inner Galaxy Group. They are investing 400 million dollars to build a new plant in Ewekoro, Ogun State. This facility will produce hot-rolled coils and plates. We want to make the steel industry the backbone of Nigeria’s industrial future, and by 2030, Nigeria will start producing 10 million tonnes of liquid steel,” Tinubu said.
 
According to the National Bureau of Statistics (NBS), the mining and quarrying sector contributed 4.38 per cent to the overall GDP in Q1 2025, lower than the contribution recorded in Q1 2024 at 5.47 per cent.
 
The Nigerian Minerals and Mining Act and other related laws, which are supposed to provide the needed framework to reposition the Nigerian steel industry, are yet to achieve this purpose.
 
In 2017, at the launch of the country’s steel development roadmap, which was in three phases, the then Ministry of Mines and Steel Development said the sector would contribute $27 billion to the GDP by 2025 after the execution of said roadmap. To date, this has remained a dream as the sector has fallen miserably short of that goal.
   
With an ambitious goal of creating 500,000 direct and indirect jobs and another 10-year roadmap for the sector, the government said it has a three-year plan for the operationalisation of Ajaokuta with a focus on infrastructure, regulatory reform and capacity development.
  
However, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, noted that unless a sound strategy and plan are put into action and yield tangible results, it remains difficult to be optimistic about the government’s promises.
 
Stressing that Ajaokuta’s technology and machinery are obsolete, he lamented that the plant has been cannibalised and suffered all manner of failed concessions over the years.
 
He explained: “We need to see a plan that will deliver outcomes, particularly from a funding point of view. At this point, the government should not be committing public funds to projects like Ajaokuta. I struggle to see how this would pan out because Itakpe, which is supposed to supply iron ore to Ajaokuta, is also moribund.” He noted that, beyond reviving Ajaokuta itself, the other companies and components that provide the raw materials have to be revived as well.
 
Yusuf added: “We need to see this current roadmap that the government said it has drawn up and how these projects will be funded, but, in the meantime, we do not want to see the government committing any funds to these steel-plants revival projects because that has become a money-making scheme. The government can have equity if it so desires.
  
“Beyond the government’s claims of the country producing 10 million tonnes of liquid steel by 2030, industry stakeholders need to see the roadmap to ascertain this claim’s feasibility.”
 
He urged the government to unbundle Ajaokuta completely, as it has different arms which can all sufficiently stand on their own. Aside from the rolling mills and so on, it has a huge real estate and a port. They all need to be unbundled, but the process must be transparent and fair. What is needed now is a public-private partnership (PPP) arrangement, with government being a very minority stakeholder,” he said.
 
Beyond Ajaokuta, he said, it must be interrogated why all the other rolling mills in Jos, Katsina and Osogbo are also non-functional.
 
“Any promise can be made, but it goes beyond making promises because we have heard it all before. The government has no business in things like running a steel plant and should stay out completely and leave it to the private sector to run. We can try to obfuscate the matter, but it is clear that the greatest issue affecting this sector is blatant corruption, and sadly, we cannot industrialise, on any scale, without a thriving steel sector,” he said.
   
On his part, former Manufacturers Association of Nigeria (MAN) chair, Apapa branch, Frank Ike Onyebu, regretted that it is a shame that the steel sector is still in a terrible state despite the billions of dollars that have been pumped into it.
 
He noted that all the defunct steel mills scattered all over the country are outdated and obsolete and in need of total modernisation and rehabilitation.
 
“It would be great for the country and economy as a whole if we can get all these mills working again, and personally, I would be overjoyed as the country is long overdue for a vibrant steel sector. However, I doubt those steel companies can be revived. It is very sad that the past buyers and former concessionaires, after buying those mills, scrapped what they could from them and abandoned them with no single plan of bringing them back to life to actually do what they are supposed to produce steel. The situation is exactly that of the former NEPA, which was sold to people who have no single idea of the business. Worse, they have no interest whatsoever in investing properly in the sector, which is why we see what is happening to most of the DisCos today. They just happened to be connected and wanted to make quick money. It is why the power sector is still struggling and the government is still paying ‘subsidy’ to them”, he said.
  
On how the sector can be truly revived to drive industrialisation, he said it must be turned over to serious-minded players in the private sector.
Urging massive incentives on the part of the government to instigate interest in the plants, he argued that the government’s primary assignment is to provide a stable environment that will welcome foreign investors.
 
He said: “Some people might be willing to invest if they see a stable business environment; sadly, we do not have that. No serious investor will put that kind of money in an environment such as ours, where one unserious policy will set them back and leave them bankrupt. Government should step back completely and simply create an environment that will encourage players to come in and do business, as well as create business/investment-friendly long-term goals and policies that must be pursued aggressively and relentlessly.”
  
Pointing out that any economy serious about moving forward industrially must grow heavy-duty sectors such as the mining and steel sectors, he lamented that the government continues to pay lip service to the country’s industrialisation drive.
  
He accused the government of double-speak and insincerity of purpose on the revival of the failed project, saying: “You cannot plant corn and expect to harvest yams, it is not done. As of today, I put it to you that no single government agency is helping businesses or our drive for industrialisation, not a single one. They are all chasing revenue collection and are always so proud to announce they made so and so amount of money, all at the detriment of local businesses and investments. Businesses are failing every day. Investors are pulling out in their numbers, but the government and its agencies are not asking why this is happening or looking for solutions. They don’t even show any concern.
  
“Instead, they want to squeeze and tax the remaining businesses to death. If the government cannot adequately manage the businesses still managing to hang on, how do they expect new players to confidently come in and invest billions of dollars?”
   
He pointed out that many investors are pulling out of the country and relocating to neighbouring African countries that have a better business environment, which does not seem to bother the government.  He stressed that available data suggest that there are more exits than incoming investors.
 
“Kenya, with their small population, is pulling 10 times the number of investors Nigeria is pulling in a year and yet, the government is not worried,” he said. He expressed worry that Nigeria is still overly dependent on oil revenue and noted that other oil-producing countries are copying the Chinese model by divesting heavily into manufacturing and industrialisation as they have realised that manufacturing is the future.
  
“Since the 70s, we have been talking about industrialisation and diversification, with thousands of promises made and nothing to show for it till date. No single country can succeed without industrialisation. Check all the top economies and what they have going for them. None of them is reliant on natural resources to succeed; they have all embraced manufacturing and aggressive industrialisation. We have all it takes to become a global powerhouse with the resources, land and a young population we have.”
 
The Director-General, Lagos Chamber of Commerce and Industry (LCCI), Dr Chinyere Almona, said while the new roadmap may look good on paper, it must seek innovative ways to revitalise Ajaokuta, the Nigerian Iron Ore and Mining Company (NIOMCO), as well as the others.
 
“The sector has so much potential, which has been underutilised all these years. To ramp up investments in this sector and welcome new players, we need to deploy more relevant research and technology to trace more mineral deposits and make more relevant data available to interested investors,” she said.