The Ajaokuta Steel Project

Abstract

AbstractThe Ajaokuta Steel Project has been a widely visible symbol of Nigerian industrialization through steel production for 50 years. At the writing of this book, at least $5 billion have been spent, and a workforce of 3000 people live and work on site to maintain it, but not one ton of steel has been produced.The project started as an ambitious industrialization project in 1971, awarded to a Soviet contractor. After delays from limited financial and manpower capacity, it was stopped by a new government in 1983 under corruption charges and lay fallow for 17 years. In 2000, civilian President Obasanjo restarted the project that he had initiated in 1971 as military president, now in a public–private partnership (PPP) scheme. But this again fell apart because of corruption charges and then lawsuits from the firm that had purchased the licence and did not want to be pushed out. Today, the government is looking for a new private partner. The case also discusses the fundamental question of whether the idea of industrialization through steel (rather than other technologies) is still sufficiently relevant to justify the reviving of equipment that was designed 40 years ago.