Nigeria may be edging closer to unlocking one of its biggest unrealised economic assets as the Federal Government moves to revive the Ajaokuta Steel Company through a landmark 20-year gas supply arrangement, a development industry insiders say could save the country billions of dollars in foreign exchange, create thousands of skilled jobs and reposition the manufacturing sector.
A senior official in the Federal Ministry of Steel Development, who spoke to BusinessDay over the weekend, on condition of anonymity since he was not authorised to comment publicly, described the latest agreement as “the strongest commercial foundation the Ajaokuta project has had in decades.”
According to the source, previous administrations concentrated on ownership disputes, funding challenges and concession arrangements, while paying insufficient attention to the single most critical factor for steel production—guaranteed and affordable energy.
“Without reliable gas, Ajaokuta cannot operate profitably. This agreement changes that equation. Investors require certainty before committing billions of naira to rehabilitation and operations, and the gas supply agreement provides that certainty,” the official said.
The optimism follows the signing of a Memorandum of Understanding and a 20-year Gas Sale and Aggregation Agreement involving the Nigerian National Petroleum Company Limited (NNPC Ltd), Ajaokuta Steel Company Limited (ASCL), NNPC Exploration and Production Limited (NEPL) and the Gas Aggregation Company of Nigeria (GACN) during…
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