Ajaokuta Steel Company Pays N38.9 Billion in Salaries Without producing a single sheet of steel – Investigation reveals

Despite being a moribund company, the Ajaokuta Steel Company has received a staggering sum of N38.9 billion in salaries and allowances over the past 10 years.

The company, which was conceived in 1979 to be a major player in Nigeria’s industrialization, has yet to produce a single sheet of steel since its inception.

The plant, which was initially intended to employ about 10,000 workers, with an additional 500,000 people expected to be engaged in related industries across the country, has remained inactive for over 45 years. Despite its inactive status, the company continues to receive substantial annual budget allocations from the government.

According to a breakdown of the company’s annual budget between 2014 and 2024, the government has disbursed a total of N29.11 billion in salaries and wages, and N9.8 billion in allowances to its staff. In 2024 alone, the government allocated N4.2 billion for personnel costs, with some workers reportedly collecting salaries despite hardly finding anyone on site.

Economists and experts have criticized the situation, describing it as a waste of resources. According to Paul Alaje, chief economist at SPM Professionals, the payment of salaries to workers without any productive work is a waste of the country’s resources. He suggested that the government engage in public-private partnerships or allow foreign companies to partner with the Federal Government to complete the project.

Professor Abayomi Adebayo of Obafemi Awolowo University also weighed in on the issue, stating that paying such an amount would translate to throwing the country’s scarce resources into the drain. He suggested that the government should terminate the workers’ appointments and stop paying them salaries for work not done.

The Ajaokuta Steel Company’s failure to produce steel has been attributed to mismanagement, with some units of the plant being operational at various times but ultimately remaining incomplete. In 2019, former President Muhammadu Buhari and Russian President Vladimir Putin agreed on a revitalization of the steel mill with Russian support and project funding from Afreximbank and the Russian Export Centre. However, the project was delayed due to the COVID-19 pandemic and eventually abandoned.

In January 2024, Tinubu opened discussions with a Chinese steel company, Luan Steel Holding Group, to revive the Ajaokuta Steel Company. However, these discussions have yet to yield any results.

As Nigeria continues to struggle with economic challenges, experts have called for a more pragmatic approach to revamping the Ajaokuta Steel Company. The government’s continued allocation of funds to the company without any tangible results is unsustainable and may further exacerbate the country’s economic woes.

In related news, Dangote has abandoned his plans to invest in the Nigeria’s steel industry.