Aliko Dangote, chairman and CEO of the Dangote Group, has made a striking pronouncement: “Ajaokuta Steel Company will never work.” In a recent video shared on social media, Dangote contrasted the moribund steel complex with rapid technological advances in other sectors, arguing that efforts to resurrect the facility are as futile as comparing outdated vehicles with modern electric cars.
This declaration adds a new chapter to the long saga of Nigeria’s most controversial industrial project. Built between 1979 and the mid-1990s, Ajaokuta Steel—located in Kogi State—was designed as an integrated steel complex, intended to serve as a backbone for Nigeria’s industrialization. Yet despite decades of investment, political reforms, privatization attempts, and infrastructure pledges, the plant has never (or barely) operated at full capacity.
Dangote’s Arguments: Why He Believes Ajaokuta Is No Longer Viable
1. Technological Obsolescence
Dangote made clear the core of his critique: the technology underlying Ajaokuta is outdated. He compared it to the old Volkswagen “Igala” vehicles, contrasting them with modern Kia models, to illustrate how industries that fail to keep up become irrelevant.
2. Cost of Operation vs. Efficiency
He highlighted the high cost of running such a plant—especially in a country beset by expensive electricity and infrastructural deficits—and suggested that the economics no longer support reviving Ajaokuta as it stands.
3. Analogy to Life and Death
To underscore his point, Dangote used vivid imagery: trying to revive Ajaokuta is like dragging someone from a dying bed and asking them to sprint 100 meters. It’s a metaphor to say: some systems are so broken, and so behind the times, that recovery may be practically impossible.
Contrasting Views & Government’s Position
While Dangote says it “will not work,” the federal government continues to insist that Ajaokuta can be revived—but acknowledges the magnitude of the task. Below are key recent developments:
Technical and Financial Audits: The Ministry of Steel Development is pursuing technical/financial audits of the complex as part of a revival plan.
Partnerships with Foreign Firms: Government officials are in talks with global steel manufacturers, including companies in Russia and China, to attract investment and expertise.
Cost Estimates of Revival: Estimates for resurrection range from US$2 billion to US$5 billion, depending on how comprehensive the restoration of infrastructure and operations must be.
Revival Strategy: A key part of the government’s plan is a phased or “piecemeal” approach—starting with smaller functioning units, such as the light steel mill (producing iron rods), before attempting full-scale revival.
Underlying Challenges That Fuel Dangote’s Skepticism
Dangote’s pessimism isn’t without foundation; multiple structural deficiencies and historical missteps weigh heavily against the Ajaokuta steel complex:
Obsolete Blast Furnace Model: The complex is built around a blast furnace system, which requires large quantities of coking coal—a resource Nigeria lacks in commercial amounts—and constant, reliable power. The technology itself is increasingly being supplanted elsewhere by more efficient, flexible methods.
Poor Infrastructure: Insufficient power, unreliable supply chains (raw materials, fuel, etc.), transport bottlenecks, and deteriorated physical facilities.
Funding and Policy Instability: Over four decades, there have been repeated stop-start efforts, policy reversals, contested privatization deals, and under-funding.
Legal Disputes & Ownership Issues: Past concession agreements (for instance with foreign firms) have often ended in disputes and unsettled claims.
What This Means for Nigeria’s Industrial Strategy
If Dangote’s assessment holds weight, the implications are significant:
Need for Alternative Models: Instead of trying to breathe life into the old colossus, perhaps Nigeria should invest in smaller, modern mini-mills or steel units closer to raw materials and reliable energy sources. Such smaller units might be more cost-effective and sustainable. Experts have already suggested adoption of modern technologies like Compact Strip Production (CSP) for steel, which offer greater efficiency.
Prioritize Energy and Infrastructure: For any steel operation to succeed, electricity, routes for transportation, stable supply of raw materials are non-negotiable. Without addressing these, even modern plants will struggle.
Focus on Private Sector Engagement and Innovation: Given the history of governmental effort with limited success, perhaps a stronger role for competent private investors, performance-based contracts, and transparent frameworks is warranted.
Re-examine Legal, Environmental, and Opportunity Costs: Maintaining non-operational facilities drains resources, but so does trying to revive them without a clear, updated plan. The environmental, economic, and social opportunity costs of both action and inaction are large.
Dangote’s recent declaration that “Ajaokuta will not work” is more than just a provocative statement—it underscores a fundamental crossroads for Nigeria. Either the country adapts, modernizes, and reallocates its industrial strategy toward feasible, technology-fit solutions, or continues to invest in monumental but possibly irreparable assets, at great cost.
For stakeholders and policy-makers, the questions are urgent: Can Ajaokuta be reimagined rather than resurrected? Is there political will to follow through with transformative industrial policy? And ultimately, what kind of industrial future does Nigeria want—one rooted in nostalgia, or one built on sustainable innovation?
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