Nigeria has almost everything it needs to be a steel powerhouse: vast iron ore deposits, a huge domestic market, energy resources, skilled labour, and an economy that consumes steel at scale. Yet the steel sector remains comatose because of policy inconsistency, poor leadership and sundry shenanigans, reports ERNEST NZOR.

Why Nigeria has remained heavily dependent on imported steel despite its huge iron ore deposits, large domestic market, human capital, energy resources, and other requisites for a steel hub is a puzzle the country has yet to solve.

Even with over three billion tonnes of identified iron ore resources, including deposits at Itakpe and Agbaja, the country spends about $5 billion annually importing over eight million metric tonnes of steel yearly.

Such a contradiction captures the biggest failure of industrial policy – the lack of capacity to build and sustain the institutional, financial, technical and political framework required to convert advantages into a functional industrial ecosystem.

At the heart of the problem is Ajaokuta Steel Company, conceived as the foundation of the country’s industrialisation drive, but which has failed to operate at the scale envisaged by its founders decades after its establishment.

Successive administrations have announced revival plans, negotiated with investors, established committees and made political commitments. Yet, the sector has repeatedly returned to the same cycle of promises and delays.

The consequence is not merely that a steel plant remains underutilised; the major casualty is the country’s truncated or aborted industrialisation ambition.

One of the questions surrounding the steel crisis is why the country has been unable to achieve what other countries with comparable or even fewer natural resources have accomplished.

At the 5th African Natural Resources and Energy Investment Summit (AFNIS 2026), the Minister of Steel Development, Shuaibu Abubakar Audu, described steel as “the backbone of industrialisation.”

Steel is fundamental to construction, transportation, machinery, manufacturing, defence, energy infrastructure and technological development. A country that cannot produce sufficient steel locally will inevitably expose several parts of its economy to external shocks.

A civil and environmental engineer, Mr Caius Ikem Umekesiobi, offered a blunt assessment of the problem, describing it as a “case of leadership failure.”

Umekesiobi, who is also the National Chairman of the Nigerian Institution of Environmental Engineers, regretted the repeated failure of leaders to deliver on their promises, emphasised that every abandoned project and unfulfilled promise carries a cost that worsens the country’s economic plight.

For the steel industry, those costs have been particularly severe because the sector requires long-term planning as a steel plant cannot be established, abandoned and revived repeatedly without enormous financial and technical consequences.

Assistant Director and Head, Regional Geophysics at the Nigerian Geological Survey Agency (NGSA), Dr Godwin A. Alo, blamed the situation on poor coordination, inconsistency and lack of long-term commitment.

Alo, however, noted that Nigeria’s mining industry, once regarded as a dying sector, has begun to show measurable improvement after successive governments introduced reforms and maintained a degree of policy continuity.

He said that the lesson for steel is obvious: industrial development does not happen within the lifespan of a single administration.

“A steel plant may require billions of dollars, years of construction and commissioning, dedicated infrastructure, guaranteed raw material supply and stable energy before it reaches commercial maturity.
Frequent policy changes, therefore, create more than administrative inconvenience. They increase investment risk, he added.

An investor considering a multibillion-dollar steel project must be confident that the rules governing taxation, mining rights, energy supply, import duties, local content, foreign exchange and market access will not change dramatically after a change of government.

Unfortunately, Nigeria has historically offered the opposite assurance. Ajaokuta has become synonymous with the country’s unresolved industrialisation question.

The plant was intended to anchor an integrated steel industry capable of generating demand for iron ore mining, transportation, engineering, fabrication and manufacturing. Yet, the country continues to import steel as the plant struggles to achieve sustained commercial production.

Also, an integrated steel industry requires a chain of interconnected components such as reliable iron ore supply, beneficiation, energy, transportation, water, technology, skilled manpower, financing, industrial consumers and a stable regulatory framework.

According to Alo, if one component fails, the entire system is weakened. “This explains why simply ‘reviving Ajaokuta’ cannot be the entire solution. The plant must be connected to a functioning raw material and industrial ecosystem.”

But raw materials are not the problem; Nigeria’s mineral endowment further exposes the contradiction, as the country boasts over three billion tonnes of iron ore resources, including major deposits at Itakpe and Agbaja, yet does not have the capacity to produce steel.

Alo stressed the importance of geological data and proper resource assessment before steel plants are established.

He pointed out that steel production requires not only iron ore but also other essential inputs such as coal and dolomite, adding that investors must be certain that sufficient raw materials are available to sustain operations.

“Nigeria’s steel strategy must therefore move from simply identifying mineral deposits to developing bankable geological data, beneficiation capacity, logistics networks and reliable feedstock arrangements. The country cannot build a sustainable steel industry on assumptions about raw materials,” Alo added.

The establishment and strengthening of the Ministry of Steel Development under President Bola Ahmed Tinubu’s administration represents a significant attempt to give the sector dedicated political attention.

The Audu-led ministry says it is pursuing the revival of Ajaokuta, National Iron Ore Mining Company (NIOMCO), Delta Steel Company and other strategic assets.
According to the Minister, a technical audit of Ajaokuta is ongoing, and the government is in advanced discussions with China over the plant’s revival.

The government also says that five mini-Liquefied Natural Gas (LNG) plants are being developed around Ajaokuta to support industrial gas supply, with projected investment of over $500 million.

There is also an agreement between the Ministry, Ajaokuta Steel Company, the Ministry of Defence, and the Defence Industries Corporation of Nigeria (DICON) to produce materials for military hardware.

Beyond Ajaokuta, Premium Steel and Mines Limited, formerly Delta Steel Company, has submitted a plan to invest $450 million and resume production within 18 months of financial closure.

The ministry also disclosed a $400 million investment in an integrated steel project at Ewekoro, Ogun State, while a proposed $1 billion partnership with India’s Rashmi Metaliks covers mining, ductile iron pipe production and critical mineral processing.

The developments suggest that the government is attempting to move beyond the traditional Ajaokuta-centred approach and build a broader steel value chain.

But this is where the administration will face its biggest test. The real measure of success will not be the number of memoranda signed, groundbreaking ceremonies conducted or investment announcements made. It will be the tonnes of steel produced, the mines supplying the plants, the factories consuming the products and the jobs created.

The government’s strategy contains several encouraging elements, particularly its emphasis on mining-to-metals linkages, local value addition, private investment, technology transfer and industrial clusters.

The proposed Nigeria Metallurgical Industry Bill could also provide a stronger legal and regulatory framework for the sector if successfully enacted and effectively implemented.

The country’s previous industrial experience demonstrates that institutions can be created without achieving their intended objectives.

The annual $3 billion to $5 billion steel import bill is often presented primarily as a foreign exchange challenge, and every tonne of steel imported is potentially a tonne that could have been produced domestically, creating demand for iron ore, energy, transport services, engineering and labour.

A functional steel industry will have a multiplier effect across the economy. It will stimulate mining, rail transportation, power generation, engineering, construction, fabrication and manufacturing. Consequently, failure to develop the sector has contributed to wider industrial weakness.

But according to Audu, the challenge is not peculiar to Nigeria, as no African country featured among the world’s top 10 steel producers in 2025, despite the continent’s enormous deposits of iron ore and other steelmaking minerals.

Globally, crude steel production was estimated at 1.849 billion tonnes in 2025, with the top 10 producers accounting for 84 per cent of output.

For Umekesiobi, beyond the effect of importation on foreign exchange, the high cost of steel has ripple effects on infrastructural development.

“We have a problem of leaders failing in their campaign promises, and this affects the economy, industry and even the practitioners in our various fields.

“Whatever political promises have not been fulfilled always come at a cost. Some of them have multiple ripple effects across the economy and society.

“As professionals and advocates, we urge our leaders to live up to their promises. We are ready to collaborate with the government to fulfil their promises to the people”, he said.

The most important historical lesson is that no administration can afford to treat the industry as a four-year political project; steel development must survive elections and changes in government.

The proposed Metallurgical Industry Bill, if carefully designed and effectively implemented, could provide part of the continuity supported by institutions capable of enforcing standards, protecting investors and holding both government and private operators accountable.

President Tinubu’s administration has presented an ambitious programme for the sector, ranging from the technical audit and proposed revival of Ajaokuta to new investments, private-sector partnerships and stronger mining-to-metals integration, presenting an opportunity to finally break from the cycle of abandoned projects.

But the government must recognise that the credibility of the new strategy will ultimately depend on delivery.

After decades of policy reversals and leadership failures, the steel question has moved beyond whether Nigeria has the resources to industrialise. The real question is whether its leaders can finally provide the consistency, discipline and long-term commitment required to turn those resources into industrial wealth.