FG Targets End-2026 Deal with Chinese Firm to Revive Ajaokuta Steel, Seeks Up to $2bn Investment

The Federal Government says it is on course to sign a major agreement with a Chinese company before the end of 2026 to revive the long-dormant Ajaokuta Steel Company, in what officials describe as a significant step toward repositioning Nigeria’s steel industry.

Minister of Steel Development, Sha’ibu Abubakar Audu, disclosed this during an appearance on the Nigerian Television Authority (NTA) programme Good Morning Nigeria, where he outlined the Tinubu administration’s plans to restore the country’s flagship steel complex.

According to the minister, negotiations with a Chinese investor have reached an advanced stage, expressing confidence that a formal agreement for the plant’s revival will be concluded before the end of the year.

Audu said the government is pursuing private sector investment because the estimated cost of reviving Ajaokuta Steel—between $1.5 billion and $2 billion—is beyond what the Federal Government can finance alone.

Established in 1979, Ajaokuta Steel has remained non-operational, having never produced liquid steel despite decades of public investment.

He noted that the current administration has taken concrete steps to prepare the facility for revival, including the completion of the procurement process for a comprehensive technical audit to determine the rehabilitation needs of the steel complex.

The minister also revealed that the Ministry of Steel Development, in partnership with the Nigerian National Petroleum Company (NNPC), has commenced the development of five mini-Liquefied Natural Gas (LNG) plants within the Ajaokuta complex. The project is expected to attract approximately $500 million in foreign direct investment and strengthen industrial gas supply, particularly in northern Nigeria.

In addition, Audu said Ajaokuta Steel has signed a Memorandum of Understanding (MoU) with the Ministry of Defence and the Defence Industries Corporation of Nigeria (DICON) to manufacture military equipment, including rifles, ballistic vests and helmets, using the company’s engineering workshop.

He further disclosed that the steel company recently entered into a 20-year Gas Sale and Purchase Agreement with NNPC to guarantee a stable gas supply needed for future operations.

The minister said the various initiatives demonstrate the Federal Government’s commitment to transforming Ajaokuta Steel into a catalyst for Nigeria’s industrialisation, job creation and manufacturing growth.

Despite remaining idle for over four decades, Ajaokuta Steel continues to receive annual budgetary allocations. In the 2026 Appropriation Bill, the Federal Government proposed ₦6.69 billion for the company, with ₦6.04 billion, representing more than 90 per cent of the allocation, earmarked for personnel costs.

The proposed agreement with the Chinese investor is expected to mark a major milestone in longstanding efforts to revive the steel plant and unlock its anticipated contribution to Nigeria’s industrial development.