Nigeria Shops for $2bn Chinese Investment to Revive Ajaokuta Steel

By 𝔸bdulrazak Tomiwa

The Federal Government is in advanced talks with Chinese investors to revive the 42-year-old Ajaokuta Steel Company through a $2 billion investment. 

The plan, anchored on a production-sharing model, aims to restore large-scale steel manufacturing without requiring direct federal funding.

Joseph Tegbe, the Director-General and Global Liaison for the Nigeria-China Strategic Partnership, revealed that the preferred Chinese investor has already conducted a technical assessment. While much of the equipment is outdated, the core infrastructure remains viable, with the potential to start a rolling mill within six months of commencement.

Nigeria currently requires about 10 million metric tonnes of steel annually but produces only 1.2 million metric tonnes, mostly from recycled scrap. The new plan targets an eventual output of 10 million metric tonnes, utilizing significant iron ore deposits in Itakpe and other regions.

The partnership will follow a production-sharing arrangement rather than an asset sale, ensuring Nigeria retains full ownership. The investor will recover costs by taking a share of the output over five to ten years, after which full control reverts to the Nigerian government.

Beyond the plant, the project includes upgrading essential infrastructure like the Warri Port and rail links from Itakpe to Ajaokuta. These logistics improvements are critical for handling the large-scale transport required for integrated steel production.

The revival is part of a broader goal to rebalance trade with China, aiming for $15 billion in annual exports to reduce Nigeria’s trade deficit. The plan also includes sending hundreds of Nigerian engineers to China for specialized training to ensure long-term sustainability.