Recurrent Spending Dominates as Ajaokuta Steel Allocates N6.04 Billion for Staff in 2026
The Federal Government has proposed a N6.04 billion allocation for personnel costs at the dormant Ajaokuta Steel Company Limited in the 2026 fiscal year. This substantial provision, detailed in the 2026 Appropriation Bill, persists despite the complex remaining non-operational for over four decades. The allocation underscores a long-standing pattern of the company functioning as a non-producing entity sustained primarily by federal subventions.
Budget Breakdown Reveals Heavy Recurrent Focus
Of the company’s total N6.69 billion allocation, personnel expenses consume approximately 90.4%. This N6.04 billion is split, with N4.79 billion earmarked for salaries and wages and N1.25 billion for allowances and social contributions. These include pension, NHIS, and compensation insurance payments. The budget structure highlights a sharp imbalance, with total recurrent spending at N6.28 billion and capital expenditure limited to just N410.8 million—less than 7% of the total. This minimal capital outlay is thinly spread across minor items like computer purchases, facility construction, and rehabilitation works, doing little to return normalcy insecure industrial operations.
Continuity in Spending Amidst No Revenue Projection
Recent budget trends reveal this model is entrenched. Personnel costs rose 44.8% from N4.29 billion in 2024 to N6.21 billion in 2025. The proposed 2026 figure represents only a marginal 2.7% decrease, maintaining the core priority on staff remuneration over production revival. The budget document confirms the company projects zero independent revenue and will receive no grants in 2026, ensuring full dependence on federal funding. This scenario often draws criticism from various quarters, similar to when ASUU accuses FG of misallocating resources in the education sector, highlighting broader concerns about fiscal priorities.
While the government aims to return normalcy insecure areas through various projects, the allocation for Ajaokuta continues to fund non-core, constituency-style capital items. This spending approach stands in contrast to operational turnarounds seen when a firm like Petralon Energy appoints new leadership to drive efficiency, or when a state initiative such as Sanwo-Olu launches rural development projects with clear output targets. Without a strategic shift towards meaningful capital investment, the allocations for Ajaokuta risk perpetuating a cycle of expenditure with no tangible industrial output, a situation sometimes paralleled in cases of alleged property fraud where resources yield no discernible asset.
