Idle Ajaokuta steel gulped N1bn pensions, taxes – Report
Despite its continued abandonment and failure to operate at full capacity, the Ajaokuta Steel Company has consumed over N1bn in payments for pensions, taxes, and various other social projects, according to a 2024 report from BudgIT’s accountability platform, GovSpend.
The financial burden associated with the dormant steel complex has continued to grow, with a total of N1,105,280,696 spent over the past two years.
This includes N441,019,400 in 2024 and N664,261,296 in 2023.
The funds have been allocated across multiple categories, including pension payments, tax obligations, and various ongoing projects, despite the plant’s non-operation.
In terms of pension payments, the report showed that five pension management companies received substantial sums.
The largest payments were made to Pension Alliance Limited (N74,434,667.03) and Trust Funds Pensions PLC (N33,581,935.80).
Additional payments were made to FCMB Pension (N22,884,102.78) and others, totaling N130,900,705.61 for pensions in 2024 alone.
The report also revealed that N141,911,731.02 was paid in taxes to Kogi State, where the steel complex was located.
The funds appear to be part of the ongoing financial obligations, despite the plant remaining largely inactive for decades.
In addition to these payments, N37,162,790.02 was spent on a project aimed at empowering the local community through Stefan Jaeger Nigeria Ltd. Meanwhile, a significant N354,286,069.55 was allocated to the IPPIS Transaction Account, suggesting ongoing administrative costs.
Despite the challenges, the Federal Government is still pursuing plans to revive the steel company.
In April 2024, the Minister of Steel Development, Shuaibu Audu, revealed the government’s three-year plan to resuscitate the plant.
“We intend to visit Russia on a formal invitation from Tyamzhpromexport and other consortium partners to secure funding to the tune of about $2bn required for the revival of the entire steel plant,” Audu stated.
In January 2024, President Bola Tinubu’s administration opened discussions with Chinese steel company, Luan Steel Holding Group, in a bid to revive the facility.
The 2025 budget proposal for the Ajaokuta Steel Company has a total expenditure of N6,810,967,394, with a projected budget deficit matching the amount.
Of this, N2,406,666,667 is earmarked for project preparation and investment mobilisation, including feasibility studies and financial modelling for the steel company’s revitalisation.
The personnel cost for the company is projected to be N6,210,482,358, with overhead costs estimated at N233,315,058, and capital expenditure standing at N302,897,719.
Even in its moribund state, the company is set to allocate N10,000,000 for computerising its commerce and procurement department to comply with public procurement standards.
