Nigeria’s steel industry should be one of Africa’s strongest. The country sits on more than 3 billion tonnes of iron ore, including major deposits at Itakpe and Agbaja, and it has a large market hungry for steel. Yet it still cannot turn its own ore into steel at scale.
Officials say Nigeria needs about 10 million tonnes of steel a year but produces only about 1.2 million, mostly from recycled scrap. By one tally, roughly $4 billion leaves the country each year to pay for imported steel. President Bola Tinubu has set a target of 10 million tonnes of crude steel output by 2030.
A plant that never made steel
The clearest symbol of the problem is the Ajaokuta Steel Complex in Kogi State. Planners picked the site in 1974 because it sits near iron ore at Itakpe, limestone at Obajana and dolomite at Osara. It was declared 98% complete as far back as 1984. It has never produced a commercial sheet of steel.
Recent reports say 40 of its 42 plant units are technically complete, and over $8 billion has reportedly been spent on the project. Billionaire Aliko Dangote told a social media audience last year that Ajaokuta “will never work.”
Where policy reversals did the damage
The plant’s history is a record of changed course. Concessions were granted, challenged and revoked. Global Steel Holdings received a 10 year concession in 2005, and a renegotiated deal followed in 2016, but little changed on the ground. Court fights and costly settlements followed.
Officials have also admitted that separating the iron ore mine from the steel plant created structural inefficiencies. A steel plant needs a connected chain: reliable ore, processing, power, rail, water, finance, skilled workers and steady rules. Pull out one link and the rest struggle.
Economist Banji Oyeyinka told Vanguard earlier this year that the collapse at Ajaokuta shows Nigeria’s development problems are not mainly technical. They are about institutions and policy, he said.
Is Nigeria’s steel industry facing a reset?
The government says it is trying again. The Ministry of Steel Development, led by Shuaibu Audu, says it is pursuing the revival of Ajaokuta, the National Iron Ore Mining Company and Delta Steel. Talks with Chinese investors over a $2 billion plan have been reported, with the government describing it as a production sharing deal rather than a handover. Another report says an earlier deal with Russia has stalled.
On trade policy, Nigeria’s 2026 fiscal measures set a 35% tariff on finished steel and zero tariff on billets and hot rolled coils used by local producers. Supporters say that protects domestic mills while keeping their costs low.
Skeptics are not convinced. Commentators warn that rushing a deal risks repeating past errors and leaving Nigeria with another costly white elephant. Some argue the state should stop trying to resurrect one government owned plant and design a new industrial plan around the Ajaokuta site instead.
Nigeria’s ore is not the problem. Decades of stop and start decisions are. Another announcement will not change that. A working furnace will.
