Ajaokuta Steel revival deal with Chinese firm due before end of 2026, FG assures

The Federal Government has said it will conclude and sign an agreement with a Chinese company for the revival of the Ajaokuta Steel Company before the end of 2026. Minister of Steel Development, Sha’ibu Abubakar Audu, gave the assurance during an appearance on the NTA Network programme Good Morning Nigeria.

Audu said the current administration has taken several steps to revive the long-idle steel complex, describing the steel sector as the backbone of industrialisation in any serious economy. He noted that the Tinubu administration has prioritised securing credible technical and financial partners to revive Ajaokuta Steel, with discussions with a Chinese investor now at an advanced stage.

Government seeking private investment for revival

The minister explained that the government is seeking private investment because it cannot solely fund the estimated cost of reviving the steel plant. “For Ajaokuta Steel Company, like you know, it was established in 1979. It hasn’t produced any sheet of liquid steel since its inception. So what we did in this administration over the last three years is we took a number of measures,” Audu said.

“The first thing that we did was we have now engaged with serious partners to revive and bring in funding for the resuscitation of Ajaokuta. We are now in very, very advanced discussions with some Chinese companies, a Chinese company in particular, and we are confident that before the end of this year we can have an agreement signed for its revival.”

Audu said Ajaokuta will need somewhere between $1.5 billion to $2 billion for its revival. He explained that the Federal Government requires a partner with the financial capacity, proven execution record and technical expertise to successfully restore the steel complex to full operation.

Technical audit, gas infrastructure, and military hardware plans

Audu said the government has already commenced several initiatives to prepare Ajaokuta Steel for revival, including a technical audit, gas infrastructure development and strategic partnerships. He added that these measures are designed to position the steel plant for sustainable operations once the investment agreement is concluded.

The minister said the procurement process for the technical audit has been completed and that the assessment of the steel plant is already underway to identify facilities requiring rehabilitation and upgrade. He disclosed that the Ministry of Steel Development, in partnership with NNPC, has commenced the development of five mini-LNG plants within the Ajaokuta Steel complex, attracting about $500 million in foreign direct investment to support industrial gas supply in northern Nigeria.

Audu said the ministry and Ajaokuta Steel have signed a Memorandum of Understanding (MoU) with the Ministry of Defence and the Defence Industries Corporation of Nigeria (DICON) to manufacture military hardware, including rifles, ballistic vests and helmets, at the engineering workshop within the steel complex. He also revealed that Ajaokuta Steel recently signed a 20-year Gas Sale and Purchase Agreement with NNPC to guarantee long-term gas supply for the facility.

Decades of dormancy and continued government spending

Despite remaining non-operational for more than four decades, Ajaokuta Steel continues to receive significant budgetary allocations from the Federal Government, with personnel costs accounting for the bulk of its annual expenditure. Nairametrics reported in January 2026 that the Federal Government proposed N6.69 billion for Ajaokuta Steel Company Limited in the 2026 Appropriation Bill. Of the total allocation, N6.04 billion, representing about 90.4%, was earmarked for personnel costs.

The budget proposal underscored Ajaokuta’s continued dependence on government funding despite the steel plant not producing liquid steel since its establishment in 1979. The allocation highlighted the longstanding challenge of sustaining a non-producing public enterprise while efforts continue to attract private investment for its revival.

The proposed agreement with the Chinese investor is expected to mark a significant milestone in the Federal Government’s efforts to finally revive Ajaokuta Steel and unlock its long-anticipated contribution to Nigeria’s industrialisation agenda.

For Nigerian businesses and the broader economy, a functioning Ajaokuta Steel plant could reduce the country's reliance on imported steel, save foreign exchange, and lower construction and manufacturing costs. However, with decades of failed promises, stakeholders will be watching closely whether the 2026 deadline holds.