Economist Urges Immediate Privatization of Ajaokuta Steel to Generate $14 Billion Annually
A leading development economist has issued a stark warning about Nigeria's industrial future, demanding the urgent privatization of the long-dormant Ajaokuta Steel Company to unlock an estimated $14 billion in annual economic value.
A Monument to Unrealized Potential
Prof. Banji Oyelaran-Oyeyinka, speaking at the Virtual International Conference on Ajaokuta, described the steel complex as a "monument to unrealised potential" that symbolizes Nigeria's broader industrial decline. He revealed that the country has invested approximately $10 billion into the Kogi State facility over four decades without producing a single commercial ton of steel.
"Nigeria continues to import about $4 billion worth of steel annually, while a 1.3 million-tonne plant lies idle. That is not just waste, it is a policy tragedy," Oyelaran-Oyeyinka stated emphatically.
Historical Context and Comparative Analysis
The economist provided crucial historical context, noting that Ajaokuta was conceived in the 1970s as the centerpiece of Nigeria's industrial strategy. It was designed to:
- Supply domestic steel demand
- Anchor manufacturing sectors
- Save billions in foreign exchange
Despite these ambitious goals, the plant has never achieved commercial production. Oyelaran-Oyeyinka contrasted Nigeria's experience with successful models in China, India, and South Korea, where deliberate state-backed steel investments fueled rapid industrialization.
"Steel is the backbone of modern economies. Without it, we import poverty and export jobs," he told conference participants.
Root Causes of Failure
The professor identified three primary factors behind Ajaokuta's chronic underperformance:
- Poor leadership across successive administrations
- Corruption in management and oversight
- Chronic policy inconsistency regarding the plant's future
Privatization Proposal
To reverse this decades-long trend, Oyelaran-Oyeyinka proposed a clear solution: full privatization of the steel complex. His specific recommendations include:
- Majority ownership by a "capable Nigerian consortium"
- Strategic partnership with experienced global steel operators
- Government transitioning to a regulatory rather than operational role
Projected Economic Benefits
The economist outlined substantial economic benefits that could follow successful privatization:
- $14 billion annual injection into Nigeria's economy
- Nearly $1 billion yearly savings in foreign exchange
- Over 70,000 direct and indirect jobs created
"The time for hesitation has passed. If we are serious about industrial development, steel must come first, and Ajaokuta must work," Oyelaran-Oyeyinka insisted, emphasizing the urgency of immediate action.
