FG has propsed N6.04 billion for Ajaokuta Steel Staff in 2026 despite 40-year long zero output.
NaijaOnPoint Nigeria reports that the Federal Government has proposed to spend ₦6.04 billion on staff costs at Ajaokuta Steel Company Limited in the 2026 fiscal year, even as Nigeria’s largest steel complex remains non-operational more than four decades after it was conceived.
According to figures in the 2026 Appropriation Bill sighted by NaijaOnPoint Nigeria, Ajaokuta was allocated a total of ₦6.69 billion, with personnel expenses accounting for about 90.4 per cent of the entire budget. The structure of the allocation once again underlines the company’s long-running status as a government-funded payroll centre rather than a functioning industrial enterprise.
How the ₦6.04bn personnel budget is split
Of the amount set aside for staff costs, ₦4.79 billion is for salaries and wages, while ₦1.25 billion is allocated to allowances and statutory contributions. This includes ₦479.42 million for pension contributions, ₦239.71 million for NHIS, and ₦59.82 million for employees’ compensation insurance. Regular allowances alone account for ₦468.9 million.
The wider spending plan also reveals a deep imbalance between recurrent and capital expenditure. While total recurrent spending stands at ₦6.28 billion, capital expenditure is just ₦410.8 million, meaning less than seven per cent of the company’s 2026 budget is directed towards assets, rehabilitation or infrastructure.
Capital spending is spread thinly across minor items. ₦56.4 million is for fixed assets such as computers and security equipment, ₦129.2 million for construction and facilities, and ₦225.2 million for rehabilitation and repairs, mostly tied to electricity and office buildings. Analysts say this is far from what is required to revive a heavy industrial plant meant to anchor Nigeria’s steel and manufacturing value chain.
Rising salary bills, shrinking reform
Recent budget trends suggest little has changed. Ajaokuta’s personnel cost rose from ₦4.29 billion in 2024 to ₦6.21 billion in 2025, a 44.8 per cent increase despite zero production. The proposed ₦6.04 billion for 2026 represents only a 2.7 per cent decline, leaving the underlying structure of salary-dominated spending intact.
Zero revenue, full dependence on FG
The 2026 budget projects zero independent revenue for Ajaokuta and no external grants, leaving the company completely dependent on federal subventions. Yet, it continues to be linked to constituency-style projects such as solar street lighting, water schemes, road repairs and grants to market women and youths in parts of Niger East and Kwara North—projects that have little connection to steel production.
Separately, the Federal Ministry of Steel Development has provided ₦150.99 million for the revitalisation of Ajaokuta and the National Iron Ore Mining Company (NIOMCO), alongside ₦1.06 billion for project preparation aimed at attracting investors. This includes feasibility studies, environmental and social impact assessments, and financial modelling.
However, these figures are lower than in 2025, when ₦2.41 billion was allocated for project preparation and ₦250.98 million for revitalisation, indicating a 56 per cent drop in preparatory spending year-on-year.
A steel giant still stuck on paper
Conceived in 1979 as Nigeria’s flagship industrial project, Ajaokuta was meant to cut steel imports, drive industrialisation and support economic diversification. Over 40 years later, budget patterns suggest it functions largely as a salary-paying institution, not a producing steel mill.
The company says it employs about 3,000 workers and claims that full commissioning could directly engage 10,000 staff, with upstream and downstream industries supporting up to 500,000 jobs nationwide. For now, the 2026 budget paints a familiar picture: a steel complex sustained by recurrent spending, while actual revival remains stuck at the level of studies and plans rather than real output.