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Senate Criticizes Steel Ministry Over 2025 Zero Capital Release, Delays in Project Implementation

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By Fatima Saka

The Senate Committee on Steel Development has called for greater accountability, transparency, and a clearly defined strategic framework for the revival of the Ajaokuta Steel Complex, as the Ministry of Steel Development presented its 2024 and 2025 budget performance alongside the 2026 budget proposal.

During the budget defence session, lawmakers raised serious concerns over low capital releases, delayed project implementation, and the absence of tangible progress in the revitalisation of critical national steel assets.

The Ministry of Steel Development and its agencies were allocated ₦24.143 billion in the 2024 Appropriation Act. For the Ministry’s headquarters, the breakdown included ₦1.66 billion for personnel, ₦383 million for overhead, and ₦11.06 billion for capital expenditure.

As at December 31, 2025, overall releases stood at 56.5 per cent. While personnel and overhead recorded 100 per cent releases, only 48.4 per cent of capital funds were released. The Committee noted the slow pace of capital implementation and demanded detailed explanations on timelines and measurable outputs tied to the released funds.

In the 2025 fiscal year, personnel releases reached 88.6 per cent, and overhead funds were partially implemented. However, capital releases stood at zero per cent. Lawmakers described the absence of capital funding as a significant setback to project execution and a major obstacle to the long-anticipated revival of Nigeria’s steel sector. They warned that future budget considerations would be strictly reconciled with performance records.

For 2026, the Ministry proposed ₦21.52 billion, with approximately 70 per cent classified as carryover obligations. The Committee emphasized that the 2026 budget must prioritise the completion of ongoing projects, ensure measurable outputs and value for money, strengthen institutions, attract strategic private sector participation, and align with national industrialisation goals. Members cautioned that the proposal would undergo rigorous scrutiny to ensure it reflects realistic and performance-driven planning.

A major focus of the session was the stalled revival of the Ajaokuta Steel Complex. The Minister disclosed that a Memorandum of Understanding (MoU) signed in September 2024 with a Russian consortium failed to progress due to funding constraints associated with the Russia–Ukraine conflict. He revealed that the estimated cost of revamping Ajaokuta ranges between $1.5 billion and $5 billion—figures far beyond current budgetary provisions.

According to the Minister, discussions have since shifted to Chinese investors, citing their financing capacity, technical expertise, and speed of execution, with negotiations said to be at an advanced stage pending necessary approvals. However, Committee members raised concerns over due diligence processes, limited access to previously signed MoUs, unclear implementation timelines, and what they described as over-reliance on foreign investors.

Several lawmakers proposed alternative funding models, including raising funds through the Debt Management Office (DMO), activating specific production lines independently, and leveraging public-private partnerships with domestic industrial investors. The Committee stressed that Ajaokuta’s revival must not amount to blanket privatisation but should adopt a phased and strategic framework that safeguards national interest.

Lawmakers also expressed concern over their inability to conduct oversight visits to Ajaokuta and the National Iron Ore Mining Company (NIOMCO), citing reported security challenges, and directed that adequate arrangements be made to facilitate oversight visits before the end of the second quarter of the year.

Debate emerged over whether NIOMCO should remain under the Ministry of Steel Development or be transferred to the Ministry of Solid Minerals to leverage exploration funding. The Minister maintained that NIOMCO and Ajaokuta are integrated components of the steel value chain and should remain under a unified supervisory structure.

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The Committee further queried the status of the Metallurgical Industry Bill, noting that the referenced version originated from the Ninth Assembly and is no longer active. The Ministry was urged to urgently resubmit an updated bill to the current Assembly to provide the necessary legal framework for sector reform.

In closing, the Senate Committee assured the Ministry of continued collaboration while reiterating that accountability, transparency, and measurable performance remain non-negotiable. Lawmakers affirmed their determination to ensure that Nigeria’s steel sector fulfills its strategic role in driving industrialisation, employment generation, infrastructure development, and economic diversification.