The Nigerian government has announced plans to privatize the long-dormant Ajaokuta Steel Company in a bid to revive the facility and unlock its potential as a cornerstone of the nation’s industrial growth.
Shuaibu Abubakar Audu, the Minister of Steel Development, revealed this during a recent briefing, emphasizing that private investment and technical expertise are critical to making the plant operational after decades of inactivity.
Background of Ajaokuta Steel Company
Established in 1979 in Kogi State, the Ajaokuta Steel Company was envisioned as a flagship project to propel Nigeria’s industrialization. Designed to produce 1.3 million metric tonnes of steel annually, it was expected to reduce the country’s reliance on imported steel and drive economic diversification.
However, mismanagement, corruption, and legal disputes plagued the project, leaving it inoperational for over four decades. Despite various attempts to revive the plant, it has yet to produce a single sheet of steel, making it a symbol of unfulfilled potential in Nigeria’s industrial sector.
Minister Audu stressed the importance of privatization as a means to inject capital and expertise into Ajaokuta Steel. Speaking at the briefing, he explained:
“Privatization is a pragmatic move that will help us tap into the vast potential of the Ajaokuta Steel Company. We need competent international investors who can revamp operations and make this facility functional.”
The government plans to create an investment-friendly environment to attract reputable private sector players, aligning with global trends where privatized state enterprises often yield better results.
In September 2024, the Nigerian government signed a Memorandum of Understanding (MoU) with Tyazhpromexport (TPE), the Russian consortium initially involved in constructing the plant. This partnership aims to rehabilitate both the Ajaokuta Steel Complex and the National Iron Ore Mining Company (NIOMCO).
During his visit to Moscow, Minister Audu described the agreement as a turning point:
“This partnership with TPE is a bold step towards creating a sustainable industrial base for Nigeria’s economy. The revival of our steel sector will significantly reduce our reliance on imported steel products, which costs us over $4 billion annually.”
The partnership will facilitate a comprehensive audit of the facility, paving the way for targeted rehabilitation and eventual resumption of operations.
A fully operational Ajaokuta Steel Complex could transform Nigeria’s economic landscape. Experts project that the plant could generate over 500,000 direct and indirect jobs, bolster the country’s GDP, and reduce dependence on imported steel. This aligns with President Bola Tinubu’s vision of growing Nigeria’s economy to over $1 trillion by 2030.
The Nigerian government is set to privatize the Ajaokuta Steel Company, aiming to revive the dormant facility and drive economic growth. Discover how this move could reshape Nigeria’s steel industry and boost its economy.
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