Nigeria’s unemployment crisis is not caused by a lack of opportunities but by a government that refuses to let go of industries it has already run into the ground. Ajaokuta and Delta Steel are nothing more than billion-naira burial grounds for corruption while millions of Nigerians remain jobless. To be clear, Nigerian politicians have mastered the art of economic sabotage, keeping strategic industries under state control, not to develop them, but to milk them dry while leaving the youth to roam the streets jobless.
In the grand theater of Nigeria's industrial ambitions, the Ajaokuta Steel Company and Delta Steel Company have long stood as monumental set pieces—grand in design but hollow in execution. These state-owned enterprises, conceived with the promise of propelling Nigeria into the league of industrialized nations, have instead become emblematic of bureaucratic inefficiency and systemic corruption. For decades, they have remained dormant, consuming vast sums of public funds without yielding the steel that was meant to build the nation's future.
The tale of Ajaokuta Steel is particularly illustrative. Initiated in 1979 under President Shehu Shagari, the project was envisioned as the bedrock of Nigeria's industrialization. By 1994, it was reportedly 98% complete, with 40 of its 43 plants constructed. Yet, despite this near-completion, the facility has never produced a single sheet of steel. Instead, it has become a financial black hole, with successive governments allocating billions of naira to its resuscitation, only to see these funds vanish without tangible results. As of 2024, the Nigerian government had appropriated a staggering N4.2 billion ($2.8 million) for the personnel costs of Ajaokuta Steel, even though the plant remains non-operational. Senator Natasha Akpoti-Uduaghan, representing Kogi Central, expressed her bewilderment: "Despite the huge amount of money spent as personnel cost by the steel company on yearly basis, no steel has been manufactured and no mill rolled."
Delta Steel Company (DSC) offers a similar narrative. Commissioned in 1982, DSC was designed to produce 1 million tonnes of liquid steel annually. However, it never achieved its intended capacity. By 1995, operations had ceased entirely, plagued by mismanagement and corruption. In a bid to revitalize the moribund facility, the Nigerian government privatized DSC in 2005. Unfortunately, this move did little to restore its functionality, as the privatization process was marred by irregularities and failed to attract competent investors.
The persistence of these failures raises pressing questions about the role of government in business. The Nigerian government's tight grip on key sectors, including steel production, has often stifled private investment and innovation. The Nigerian Enterprises Promotion Decree of 1972, for instance, restricted foreign participation in various industries, aiming to promote indigenous control. While well-intentioned, such policies have frequently led to monopolies, inefficiencies, and a lack of competitiveness.
This restriction has had dire consequences for job creation. The human cost of these policy missteps is profound. Nigeria, a nation rich in natural and human resources, grapples with high unemployment rates. The World Bank reported that as of 2023, Nigeria's unemployment rate stood at a staggering 33%. The steel industry, with its potential to create millions of jobs, remains incapacitated, its promise unfulfilled. The government's reluctance to fully embrace private sector participation in this and other critical industries has deprived countless Nigerians of employment opportunities and stymied economic growth.
Beyond unemployment, the closure of these steel companies has had ripple effects across the economy. Without a functional steel industry, Nigeria continues to depend on imported steel products, further draining the nation's foreign reserves. Industries that rely on steel for production, such as automobile manufacturing, construction, and infrastructure development, are forced to operate under uncompetitive conditions, relying on costly imported raw materials. This not only weakens local industries but also raises the cost of goods and services for the average Nigerian.
Moreover, the culture of paying salaries to idle workers exacerbates the problem. At Ajaokuta Steel, despite its inactivity, a significant workforce continues to draw regular salaries. This practice not only drains public resources but also fosters a culture of complacency and unaccountability. As Senator Akpoti-Uduaghan pointedly asked, "Who are the workers collecting monthly salaries from the appropriated N4.2 billion? Statistically, if N300,000 is paid to 14,000 people per month for a year, you will get N4.2 billion or N500,000 to 8,400 workers per month in a year. Where are the 14,000 or 8,400 workers in Ajaokuta?"
The entanglement of politics and business has further muddied the waters. Politicians have historically used these enterprises as conduits for patronage and embezzlement. The recent Senate investigation into the alleged unlawful payment of $496 million to Global Infrastructure Holdings Limited (GIHL) in 2022 underscores the depth of corruption associated with these projects. Such scandals erode public trust and deter potential investors, both domestic and foreign.
The Nigerian government's monopoly over steel production has blocked private investors who could have turned these plants around. Many Nigerian entrepreneurs and foreign investors have expressed interest in reviving the sector, but bureaucratic red tape and political interests have kept them out. The government's protectionist stance has done nothing but worsen the decay in the sector, proving once again that public sector-led industries in Nigeria often end in disaster.
In contrast, countries like China and India have demonstrated the transformative power of a robust steel industry. China's meteoric rise to industrial prominence was significantly bolstered by its steel production capabilities. By investing heavily in this sector and encouraging private participation, China has become the world's largest steel producer, fueling its infrastructure boom and economic expansion. Similarly, India's liberalization of its steel industry has attracted private investment, leading to increased production and job creation. Nigeria has all the necessary resources to replicate these successes, yet corruption and government interference continue to hold it back.
For Nigeria to emulate these successes, a paradigm shift is imperative. The government must recognize that its role should be that of a regulator and facilitator, creating an enabling environment for businesses to thrive, rather than being an operator. This involves enacting policies that encourage private investment, ensuring transparency in transactions, and holding individuals accountable for mismanagement and corruption. Without genuine reform, the steel industry will remain a bottomless pit of government expenditure, enriching politicians and bureaucrats while leaving the country in economic stagnation.
It is often said that a man who refuses to learn from his past mistakes is bound to repeat them. The Nigerian government has had decades to learn that it cannot successfully run a business, yet it stubbornly holds onto failing enterprises like Ajaokuta Steel and Delta Steel. How long will this charade continue? How much more money will be wasted before common sense prevails? The time for action is now. The government should step aside and allow private investors to take over these moribund steel plants, inject new capital, and create the jobs Nigerians desperately need.
The proverb, "You can't make an omelette without breaking eggs," rings true here. Bold, and perhaps painful, decisions are necessary to dismantle the entrenched inefficiencies and corrupt practices that have long plagued Nigeria's steel industry. Privatization, when conducted transparently and with the right safeguards, can inject the much-needed capital and expertise to rejuvenate this sector.
In the end, the saga of Ajaokuta and Delta Steel serves as a cautionary tale of what transpires when government overreach, corruption, and mismanagement converge. It's a stark reminder that for Nigeria to harness its vast potential and alleviate the scourge of unemployment, it must relinquish its stranglehold on key economic sectors and pave the way for private enterprise to lead the charge. After all, in the theater of economic development, it's high time for the government to step backstage and let the real actors take the spotlight.
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