FG budgets N6.04bn payroll for idle Ajaokuta steel

The Federal Government has proposed to spend N6.04bn on personnel costs for workers of the Ajaokuta Steel Company Limited in the 2026 budget, even though the steel plant has not produced a single sheet of steel for more than four decades after it was conceived.

Details from the 2026 Appropriation Bill show that Ajaokuta was allocated a total of N6.69bn for the year, with personnel expenses alone accounting for N6.04bn, or about 90.4 per cent of the entire allocation.

This reinforces the company’s long-standing status as a non-performing public enterprise sustained almost entirely by salary payments.

The personnel cost provision covers N4.79bn for salaries and wages, N1.25bn for allowances and social contributions, including N479.42m for employer pension contributions, N239.71m for NHIS, and N59.82m for employees’ compensation insurance. Regular allowances alone were budgeted at N468.9m.

In comparison, overhead costs were limited to N233.63m, while capital expenditure stood at just N410.8m, highlighting the minimal resources directed towards reviving production or completing the long-abandoned steel complex.

A year-on-year review shows that while personnel spending remains elevated, it represents a marginal adjustment from previous years rather than a structural shift.

In the 2025 budget, the Federal Government earmarked N6.21bn for salaries at Ajaokuta, up from N4.29bn in 2024, despite the company’s continued inactivity. That 2025 allocation marked a 44.76 per cent increase, showing how recurrent spending on the firm has continued to rise independently of output.