The Federal Government has once again budgeted billions of naira to sustain Ajaokuta Steel Company Limited (ASCL) in the 2026 fiscal year, despite the steel complex remaining non-operational for years after it was conceived as the backbone of Nigeria’s industrialization drive.
Details from the 2026 Appropriation Bill show that Ajaokuta has been allocated a total of N6.69 billion, with N6.04 billion—about 90.4 percent of the entire provision—earmarked for personnel costs. The structure of the allocation underscores the company’s entrenched status as a non-producing public enterprise kept alive largely through salary payments rather than industrial output.
A breakdown of the personnel budget shows that N4.79 billion is set aside for salaries and wages, while N1.25 billion will go to allowances and statutory social contributions. This includes N479.42 million for employer pension contributions, N239.71 million for National Health Insurance Scheme (NHIS) payments, and N59.82 million for employees’ compensation insurance. Regular allowances alone account for N468.9 million.
Beyond personnel costs, the budget reveals a stark imbalance between recurrent and capital spending. Total recurrent expenditure for Ajaokuta in 2026 stands at N6.28 billion, while capital expenditure is limited to just N410.8 million—less than 7 percent of the company’s total allocation. This leaves little room for asset acquisition, rehabilitation, or infrastructure development that could meaningfully advance the revival of the long-dormant steel complex.
The capital allocation itself is thinly spread across relatively minor items. Fixed asset purchases, including computers, printers, and security equipment, account for N56.4 million. Construction and provision of facilities take N129.2 million, while N225.2 million is allocated to rehabilitation and repairs, largely focused on electricity-related works and office buildings. Analysts note that these expenditures fall far short of what would be required to recommission a heavy industrial facility originally designed to anchor Nigeria’s steel and manufacturing value chain.
A review of recent budget trends suggests that the 2026 proposal represents continuity rather than reform. Personnel costs at Ajaokuta stood at N4.29 billion in 2024 before rising sharply to N6.21 billion in 2025—a 44.8 percent increase despite the absence of production. The proposed N6.04 billion for 2026 reflects only a marginal 2.7 percent reduction year-on-year.
While the slight decline may appear as fiscal restraint on paper, it does little to alter the underlying spending pattern. Salaries continue to dominate the budget, while capital investment remains compressed, reinforcing the reality that staff remuneration—not steel output—remains the company’s core priority.
The budget documents further indicate that Ajaokuta is projected to generate zero independent revenue in 2026 and will receive no grants, leaving it fully dependent on federal subventions for survival. Despite its non-operational status, the company continues to feature in constituency-style capital projects, including solar street lighting in parts of Niger East and Kwara North, water facilities, road repairs, security lighting, and grants to market women and youths. While these projects are listed as ongoing, they are not linked to steel production or industrial capacity and do little to alter Ajaokuta’s dormant condition.
Separately, the 2026 budget includes revival-related provisions under the Federal Ministry of Steel Development, rather than within Ajaokuta’s own capital envelope. The ministry allocated N150.99 million for the revitalization of Ajaokuta Steel Company Limited and the National Iron Ore Mining Company (NIOMCO), classified as an ongoing capital project. In addition, N1.06 billion was set aside for project preparation aimed at investment mobilization for Ajaokuta, covering feasibility studies, Environmental and Social Impact Assessments, and financial modelling.
While these allocations signal continued planning activity, they also highlight a persistent focus on preparatory work rather than physical recommissioning. Notably, the 2026 provisions are significantly lower than in 2025, when the ministry budgeted N2.41 billion for project preparation and N250.98 million for the revitalization of Ajaokuta and NIOMCO.
The reduction represents a 56 percent year-on-year drop in project preparation spending, even as the steel complex remains idle—raising fresh questions about the federal government’s long-term strategy for a facility that has absorbed public funds for decades without producing a single ton of steel.
WHAT YOU SHOULD KNOW
The 2026 budget underscores that Ajaokuta Steel Company remains a non-operational enterprise sustained almost entirely by salaries, with over 90% of its allocation going to personnel costs, while capital investment for revival stays minimal, reinforcing decades of spending without steel production or revenue.
