…An open letter argues Nigeria should abandon decades-long revival efforts in favour of a commercially driven industrial free trade zone

 A Nigerian economist and industrial policy expert, Dan D. Kunle, has called on President Bola Ahmed Tinubu to abandon nearly five decades of attempts to revive the Ajaokuta Steel Company Limited (ASCL) and the National Iron Ore Mining Company (NIOMCO), urging the Federal Government instead to dissolve both entities in their current form, privatize viable assets and transform the sprawling complex into a privately managed industrial free trade zone.

In a second open letter addressed to the President, Kunle argued that repeated efforts by successive administrations to revive Nigeria’s flagship steel project have failed to deliver commercial steel production despite billions of dollars in public investment over the past 47 years.

The proposal marks a significant departure from decades of government policy, shifting the focus from rehabilitating Ajaokuta to maximizing the economic value of its extensive assets through restructuring and private-sector investment.

Call for a Final Policy Decision

Kunle said successive governments have repeatedly promised to revive Ajaokuta, but none has succeeded in bringing the integrated steel complex into sustained commercial operation.

According to him, Nigeria should stop treating Ajaokuta as an unfinished national project and instead make a definitive decision on its future. He argued that preserving the corporate structure has become an obstacle to the broader goal of developing a competitive domestic iron and steel industry.

He maintained that the country’s industrial ambitions should no longer depend on a single government-owned enterprise that has consistently failed to meet its original objectives.

Proposal to Break Up Ajaokuta and NIOMCO

The industrial policy expert recommended that the Federal Government direct the Bureau of Public Enterprises (BPE) to conduct a comprehensive commercial valuation of all Ajaokuta and NIOMCO assets before dissolving the existing corporate entities.

Under his proposal, production facilities, housing estates, engineering workshops, utility infrastructure, hospitals, administrative buildings and other commercial assets would be separated into independent business units for privatization or commercial development.

Kunle argued that this approach would unlock stranded assets while allowing private investors to develop commercially viable businesses without being tied to the steel company’s long-standing operational challenges.

Free Trade Zone Proposed

As part of the restructuring plan, Kunle proposed converting the Ajaokuta complex into what he described as the Midlands Free Trade Zone, an inland manufacturing, logistics and industrial hub managed by the private sector under government regulation.

He said the estate already possesses significant infrastructure, including road networks, housing facilities and proximity to the Geregu power plants, which could support a broad range of manufacturing and engineering businesses if managed under a commercially competitive framework.

Rather than relying on a single state-owned steel producer, he argued, the site should accommodate multiple private manufacturers, exporters, logistics firms, technology companies and industrial service providers.

Questioning Continued Public Spending

Kunle also questioned continued government spending on Ajaokuta despite the absence of commercial steel production.

He argued that previous investments, estimated at more than $6 billion over several decades, should not justify additional expenditure under what economists describe as the “sunk cost” principle.

According to him, public funds committed annually to maintaining the company could instead be redirected toward infrastructure, power generation, education, healthcare and industrial development capable of generating stronger economic returns.

Call for Transparency and Accountability

Beyond restructuring, Kunle urged the Federal Government to undertake a comprehensive review of Ajaokuta’s financial and contractual history, including concession agreements, procurement decisions, arbitration settlements and rehabilitation programmes.

He said any evidence of negligence, corruption or mismanagement uncovered during such reviews should be investigated by the appropriate authorities, while emphasizing that accountability should not delay decisions on the project’s future.

Background

Construction of the Ajaokuta Steel Company began in the late 1970s as the centrepiece of Nigeria’s industrialization strategy. Designed as an integrated steel plant supplied by iron ore from NIOMCO in Itakpe, the complex was expected to support industries ranging from construction and transportation to oil and gas, manufacturing and defence.

Despite decades of investment by successive governments, the facility has never achieved sustained commercial steel production, making it one of Nigeria’s most enduring industrial policy challenges.

Kunle argued that President Tinubu now has an opportunity to bring closure to decades of uncertainty by replacing repeated revival efforts with a commercially driven restructuring strategy aimed at unlocking the economic value of one of Africa’s largest industrial estates.