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, disclosed this during an appearance on the NTA Network programme Good Morning Nigeria. He described the steel sector as the backbone of industrialisation in any serious economy and said the Tinubu administration has spent the last three years taking deliberate steps to bring the long-idle complex back to life.
According to the minister, discussions with a Chinese investor are at a very advanced stage. He noted that the government is seeking private investment because it cannot solely fund the estimated cost of reviving the plant, which he put at between $1.5 billion and $2 billion. “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.”
The minister explained that the government requires a partner with the financial capacity, proven execution record and technical expertise to successfully restore the steel complex to full operation. To prepare the plant for investment, the ministry has completed the procurement process for a technical audit and the assessment of facilities requiring rehabilitation and upgrade is already underway. In partnership with NNPC, the ministry has also commenced the development of five mini-LNG plants within the Ajaokuta Steel complex. Audu said the project is attracting about $500 million in foreign direct investment and is intended to support industrial gas supply in northern Nigeria.
Other preparatory steps include a 20-year Gas Sale and Purchase Agreement recently signed with NNPC to guarantee long-term gas supply for the facility. The ministry and Ajaokuta Steel have also signed a Memorandum of Understanding with the Ministry of Defence and the Defence Industries Corporation of Nigeria to manufacture military hardware, including rifles, ballistic vests and helmets, at the engineering workshop within the steel complex. Audu said these initiatives are designed to position the plant for sustainable operations once the investment agreement is concluded.
Despite remaining non-operational for more than four decades, Ajaokuta Steel continues to receive significant budgetary allocations. Nairametrics reported in January 2026 that the Federal Government proposed N6.69 billion for Ajaokuta Steel Company Limited in the 2026 Appropriation Bill, with N6.04 billion, or about 90.4%, earmarked for personnel costs. The allocation highlights the challenge of sustaining a non-producing public enterprise while efforts continue to attract private capital for its revival.
The proposed agreement with the Chinese investor is expected to mark a major milestone in the Federal Government’s effort to finally bring Ajaokuta Steel on stream and unlock its long-anticipated contribution to Nigeria’s industrialisation agenda.
