The Steel That Died When The Soviet Union Died — And Cost Nigeria $8B

At 2:15 p.m. September 29, 2025 inside Ajaokuta Steel a plate reads Made in USSR. Diesel hangs with hot dust. Caretaker in blue overalls Musa, 58, who worked at complex since 1988 wipes plate with rag. Rag leaves black streak. In Diobu Port Harcourt similar rag sits on table used every morning at 6:14 a.m. to wipe soot from window. Same black. Different source.

On July 6, 2026 Federal Government said it broke 46-year jinx. Ministry of Steel Development announced that Ajaokuta Steel signed 20-year gas supply agreement with NNPC Limited with Gas Aggregation Company and NNPC Exploration and Production involved. Ministry statement July 6, 2026 says three million standard cubic feet per day firm gas and up to 47 million interruptible up to 50 million scf per day to feed power plant.

That gas meant to power plant that swallowed more than $8 billion without rolling single coil of commercial steel. Federal presentations to National Assembly 2023 estimate at least $5 billion spent since 1979. World Bank Nigeria Public Finance Review 2022 page 34 estimates about $7 billion not adjusted. Punch investigation March 18, 2024 review of GovSpend showed N7.21 billion spent running Ajaokuta between 2020 and 2023 across 501 transactions while plant produced no steel. NBS Foreign Trade Statistics 2025 shows iron and steel imports exceeded N1 trillion in 2025 averaging N526 billion annually previous three years.

Minister Prince Shuaibu Abubakar Audu at briefing October 10, 2024 said annual steel import bill about $4 billion roughly N5.6 trillion while industry remains dependent on recycled scrap.

Cost to finish now bigger than original. Ministry presentation to Senate Committee February 12, 2025 says revamping entire complex will cost $2 billion to $5 billion light mill alone about N35 billion. 2025 Appropriation Act signed January 1, 2025 earmarked N6.21 billion for Ajaokuta mostly personnel cost for plant that does not produce.

Plant sits on 24,000 hectares. It has 68 kilometre internal road network, 24 housing estates, hospital, schools, and jetty built to receive materials. National Inland Waterways Authority records as at 2024 show jetty has not handled commercial steel shipment.

It was Soviet child. Soviet survey team discovered commercial iron ore in Itakpe early 1970s, Nigerian Geological Survey shows. July 13, 1979, Nigeria signed Global Contract with Tyazhpromexport of Soviet Union TPE for new metallurgical enterprise, Gazette July 1979 records.

TPE deployed about 1,000 Russian experts and about 3,500 Nigerian workers. Ministry records show of 482 units, 476 commissioned by October 1993. Within four years construction reached 84 percent. President Shehu Shagari at foundation commissioning 1980 called it bedrock of industrialisation. Daily Times July 18, 1980 reported.

Irish engineer who was part of construction team in 1980s later spoke to US Embassy officers. According to US Embassy Lagos, cable published by WikiLeaks reference 03LAGOS00987 dated May 9, 2003, engineer said project may have been thought feasible at start but within months senior officials were siphoning money through contracts. Cable states project used as mechanism to grant contracts at inflated prices. Views are those attributed to engineer and embassy officers not finding of Nigerian court.

1991 broke it. Retired Chief Information Officer of Federal Ministry of Information who requested anonymity because he was not authorized to speak, said he monitored two documentaries on Ajaokuta and Aluminium Smelter at Ikot Abasi in 1991. French producer told him plant may not produce flat sheets as designed due to installation defect. Copy could not be located as at September 2025. What is verifiable is midway Nigeria switched Phase 2 equipment from Soviet to Western specifications creating incompatibility with Soviet-designed blast furnace. Senate Committee Report 2002 and Ministry audit 2019 show.

Then December 25, 1991 Soviet Union collapsed. TPE lost state budget. Engineers evacuated by 1993. Construction stopped. In 1994 regime of General Sani Abacha declared plant 98 percent mechanically complete and mothballed it. Ministry audit 2019 points out figure based on equipment weight installed not operational readiness. No coking coal mine existed. Itakpe to Ajaokuta to Warri rail not completed until 2020 President Buhari commissioned it September 29, 2020. Control systems obsolete Soviet analog.

Authorities who now run ruins say same thing Soviets said. Gas is missing. Nasir Naeem Abdulsalam appointed Managing Director April 2025. Ministry announcement April 14, 2025 shows. In Channels interview May 8, 2025 he said gas supply was critical. He said without gas you cannot operate steel plant, you cannot operate independent power generation. For now only limited production engineers operating modular furnace producing manhole covers utility poles rail-track components for small market.

Man who must make gas matter is Minister Audu. September 2024, Ministry signed MoU with Tyazhmashpromexport TPE original builders to rehabilitate complete operate plant; and NIOMCO Itakpe Ministry statement September 24, 2024 shows. War stopped it. At briefing May 15, 2025 Audu said Russia-Ukraine war stalled earlier deal. He said "we are now exploring partnership with Republic of China for revitalisation of both ASCL and NIOMCO."

Economists who watched 40 years do not buy gas as only problem. Kalu Aja who visited site 2023 wrote on X March 2, 2024. No Nigerian can visit Ajaokuta see investments of more than $8bn rotting in African sun and not cry. Presentation at Lagos Business School April 2024 highlighted three conditions without which Ajaokuta cannot work functioning Itakpe supply via NIOMCO rail to move inputs outputs blast furnace that works. All three not functional at scale.

Professor Banji Oyelaran-Oyeyinka speaking at Virtual Conference July 2023 described project as monumental white elephant. Communique July 2023 quotes him, "we invested between $6 billion and $10 billion yet decades later Ajaokuta remains idle monument to unrealised potential." He noted Nigeria imports roughly $4 billion steel annually.

Dan Kunle in open letter to President Bola Tinubu published by ThisDay July 8, 2026 called for final decisive decision on future of Ajaokuta and NIOMCO warning no serious investor waiting to inject billions and complex should be unbundled and sold to private investors.

Private sector skeptical. Aliko Dangote at Bloomberg Forum Singapore November 2023 said he wanted to "make sure every steel we use will come from Nigeria." At a briefing in Lagos July 15, 2024, he said board decided they should not do steel because "if we do steel business we will be called monopoly." Bloomberg November 16, 2023 and Arise News July 15, 2024 reported.

That leaves Nigeria spending about $4 billion steel imports annually despite about 74 steel plants Manufacturers Association Report 2024 shows.

Ajaokuta is not just steel. Same Soviet Union that built it also built two oil pipeline systems stretching 920 kilometres with total output 18.7 million tons per year between 1977 and 1982. Russian Embassy records show. When Soviet Union collapsed, Nigeria lost alternative technical partner. Senate Ad-Hoc Committee on Oil Theft Report 2022 said Nigeria lost huge revenue ten years to poor oil measurement because meters never installed.

Thirty-five years after red flag came down in Moscow December 25, 1991 Ajaokuta still at 98 percent and Nigeria still imports $4 billion steel it was built to make.

On September 2, 2025 at 11:04 a.m. 4:22 p.m. and September 3 at 9:10 a.m. calls placed to Ministry spokesman Salamatu Jibaniya seeking comment. No response. TPE Moscow contact in 2019 MoU seen did not connect when called September 3 at 10:15 a.m.

At 2:15 p.m. September 29, 2025, the plate in Ajaokuta still says Made in USSR. At 6:14 a.m. October 2, 2025 rag in Diobu is still black. Between those blacks is $8 billion, 24,000 hectares, 24 estates jetty with no commercial steel shipment rail completed 29 years late and country buys what it was built to make.