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£746m Nigeria–UK Deal Sparks Debate Over Ajaokuta Steel’s Future

Published by Samuel Ayomide on April 2nd, 2026.

Nigeria’s decades-long effort to revive the Ajaokuta Steel Company has once again come under the spotlight following a £746 million export finance agreement with the United Kingdom, a development that has triggered fresh debate among industry players and policy analysts.

The agreement, signed under the administration of President Bola Tinubu, is primarily targeted at upgrading critical port infrastructure in Lagos, particularly Apapa and Tin Can Island. However, as highlighted in reports by The Bureau News, questions are being raised about whether the structure of the deal tilts economic benefits in favour of the UK.

A key component of the arrangement involves the supply of about 120,000 tonnes of steel billets estimated at £70 million by British Steel for the port modernisation project. While this is expected to support timely execution of the infrastructure upgrade, critics argue that it further exposes Nigeria’s reliance on imported steel despite its dormant but expansive Ajaokuta facility.

According to analysis carried by BusinessDay, concerns have also emerged over the broader financial flow of the project, with some observers suggesting that a substantial share of the contract value could ultimately accrue to foreign firms handling equipment supply, logistics, and technical services.

Industry stakeholders, however, have offered a more measured perspective. Ibrahim Audu Abdurrahman, Chairman of the Iron and Steel Senior Staff Association of Nigeria (ISSSAN) at Ajaokuta, stressed the strategic importance of reviving domestic steel production. He warned that neglecting Ajaokuta could weaken Nigeria’s industrial base, noting that steel remains central to job creation, manufacturing, and infrastructure development.

At the same time, some experts believe the deal could still yield indirect benefits if properly managed. As noted by The Guardian Nigeria, there are expectations that the partnership may facilitate technology transfer and technical collaboration, potentially strengthening local capacity over time.

Economic analysts have also weighed in on the implications. Daniel Onyejiuwa, an academic in economics, described the agreement as potentially advantageous in addressing immediate infrastructure needs, particularly if project timelines are adhered to. Similarly, Kehinde Ola pointed out that importing steel could serve as a temporary solution to fast-track critical projects, even as Nigeria works toward strengthening local production.

Still, the situation has reignited long-standing concerns about Ajaokuta Steel, a project initiated in 1979 that remains largely inactive despite reports that most of its core units are structurally complete. Coverage by Vanguard notes that persistent policy inconsistencies, funding gaps, and administrative challenges have continued to stall its full operation.

Meanwhile, the Federal Government is said to be exploring alternative revival strategies, including potential partnerships with foreign investors, as part of broader efforts to unlock the plant’s economic potential.

While the Lagos port upgrade is expected to enhance trade efficiency and reinforce Nigeria’s role as a maritime hub in West Africa, analysts caution that infrastructure development must be balanced with long-term industrial goals.

For many stakeholders, the central question remains whether Nigeria can leverage such international agreements without undermining its ambition for self-sufficiency in critical sectors like steel production.