When National Pride Becomes an Expensive IllusionWhen national pride becomes an expensive illusion, by Abdulrauf Aliyu
When Aliko Dangote recently declared that Ajaokuta Steel Complex will never work, his words provoked anger across the country, particularly in Kogi where the plant sits like an abandoned monument. But what he said was not novel; it was merely the blunt articulation of a truth many policymakers have long known but refused to confront. The problem is not that Nigeria does not need steel. The problem is that Ajaokuta, as conceived and left incomplete for over four decades, has no economic logic in today’s world.
The history is telling. Initiated in the late 1970s during Nigeria’s oil boom, Ajaokuta was built on Soviet-era designs at a time when global steelmaking was already shifting toward modular, efficient mini-mills powered by electric arc furnaces. While South Korea’s Pohang and India’s Jamshedpur plants were completed, commissioned, and continuously upgraded to remain competitive, Nigeria’s plant never crossed that threshold. Over $8 billion has been sunk into Ajaokuta, yet not a single ton of commercial steel has been produced. This is not an industrial facility awaiting revival but an incomplete relic that has never worked. Reviving it today would require an additional $5–10 billion, only to yield an outdated and inefficient production model.
Economists call this the sunk cost fallacy – the temptation to keep spending because so much has already been invested. But sunk costs are just that: sunk. They cannot be recovered, and they should not dictate future spending. The rational question is whether new investments will produce benefits greater than their costs. In the case of Ajaokuta, the answer is no. The opportunity cost is enormous. For the same amount required to attempt revival, Nigeria could establish multiple modular steel plants across different regions, each tailored to local demand and powered by modern technologies. In the United States, more than 70 percent of steel now comes from such mini-mills; India, too, has integrated them into its strategy. They are faster to build, cheaper to maintain, and better suited to fragmented electricity and logistics systems such as Nigeria’s.
The parallels with the Kaduna and Warri refineries are striking. Like Ajaokuta, they were once symbols of national pride. Like Ajaokuta, they have consumed billions in “rehabilitation” and “turnaround maintenance” contracts. And like Ajaokuta, they remain idle, producing negligible output while Nigeria imports nearly all its refined petroleum products. Between 1999 and 2019, the federal government spent an estimated $25 billion on refinery repairs, yet utilization rates rarely exceeded 20 percent. In 2021, Kaduna’s refinery operated at just 0.7 percent of its capacity. These are not industrial assets; they are fiscal sinkholes.
What unites these cases is Nigeria’s obsession with megaprojects as symbols of sovereignty. The bigger the project, the more it appeals to political vanity. But the empirical record of megaprojects is unforgiving. Globally, nine out of ten go over budget, take longer than planned, and underdeliver on benefits. Ajaokuta and the refineries are not exceptions; they are textbook examples. They persist because they are politically radioactive to abandon. No leader wants to be the one who admits failure. No community wants to let go of the hope that the plant in their backyard might one day provide jobs. And contractors, of course, prefer the status quo of endless repairs and appropriations.
But economics has no patience for nostalgia. Every naira tied up in stranded assets is a naira not invested in projects that could deliver real impact. Nigeria’s fiscal space is already suffocating; over 90 percent of government revenue now goes to servicing debt. To continue sinking billions into dead projects is to crowd out the investments Nigeria urgently needs in power, transport, education, and healthcare. The opportunity costs are staggering: schools not built, hospitals not equipped, power plants not constructed, jobs not created.
None of this is to suggest that Nigeria does not need steel or refining capacity. It does. No industrializing economy can thrive on imports alone. But the pathway to sovereignty in these sectors lies in models that align with global best practice and Nigeria’s structural realities. For steel, that means distributed modular plants built through transparent public-private partnerships. For refining, it means competitive, privately financed facilities that can operate at scale – of which Dangote’s own refinery, for all its controversies, is the most significant example to date. The state’s role should be to set clear policy, safeguard against monopolistic capture, and ensure infrastructure and regulation support efficient competition, not to keep propping up stranded assets.
The hard truth is that Ajaokuta cannot be revived because it was never alive. The refineries cannot be sustained because their economics are broken. Clinging to them is not patriotism; it is a costly illusion. National pride is not found in monuments to failure, but in the courage to cut losses and build what works. A rational Nigeria would repurpose Ajaokuta – as a training center, logistics hub, or even a museum of industrial ambition – and redirect scarce resources to viable alternatives. It would accept that the refineries, like Ajaokuta, are lessons in what not to do, not blueprints for the future.
Dangote’s bluntness may have sounded cruel, but it reflects a discipline Nigeria desperately needs. Industrialization is not achieved by nostalgia, symbolism, or slogans. It is achieved by choices – hard, pragmatic, economically rational choices. And the choice before Nigeria today is stark: continue pouring billions into broken dreams, or cut losses and build anew. History suggests that nations which adapt thrive, while those that cling to illusions decline. The question is whether Nigeria is ready to choose progress over pride.
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