Steel Production in Nigeria Gains $400m as China and Nigeria Make New Deal

A landmark $400 million Strategic Cooperation Agreement was signed on October 29, 2025, between Nigeria’s Federal Ministry of Steel Development and Chinese investors. In collaboration with the Stellar Steel Company Limited, a Nigerian-registered subsidiary, the deal aims to establish an integrated steel plant in Ewekoro, Ogun State.

This will boost local production capacity and help Nigeria towards its ambitious target of 10 million tonnes of crude steel annually by 2030.

The project is a key pillar of President Bola Tinubu’s “Renewed Hope” industrialization agenda, focusing on economic diversification and job creation. Also a part of the agenda, it aims to reduce reliance on steel imports that currently cost the country over $1 billion in foreign exchange annually.

The agreement was signed in Abuja by Steel Development Minister Prince Shuaibu Abubakar Audu on behalf of the government and representatives from Stellar Steel. The Presidency took the privilege of announcing this development on its official channels.

It marks one of the largest foreign direct investments (FDI) in Nigeria’s manufacturing sector in nearly a decade. This further signals renewed investor confidence amid economic reforms.

The plant is expected to commence operations by mid-2026, positioning Nigeria as West Africa’s steel manufacturing hub. It is expected to cntribute $1 trillion to the national economy goal by 2030.

Nigeria’s Steel Sector Challenges and Hope

Nigeria’s steel industry has long been plagued by inefficiencies. Major projects like the Ajaokuta Steel Complex built in the 1970s-80s with Soviet aid, have remained incomplete despite billions spent.

Current capacity hovers around 1 million tonnes annually, far below demand, leading to heavy imports from China, India, and Europe. The sector contributes just 0.3% to GDP but could reach 2.8% by 2030 with reforms, per government projections.

While optimistic, the project faces hurdles from funding delays, unreliable power supply, and raw material logistics.