Fraud Uncovered in Nigeria's Ministry of Steel Development: Ghost Contractors and Mismanagement Exposed
In a highly scrutinized budget defense session held on January 17, 2025, the National Assembly Joint Committee on Steel Development revealed serious financial discrepancies within the Federal Ministry of Steel Development. Chaired by Zainab Gimba, the committee uncovered fraudulent activities that involve the alleged use of ghost contractors for several projects listed in the 2024 budget.
The committee’s investigation focused on the financial breakdown of the ministry’s expenditures, specifically highlighting capacity-building and skills training programs in the steel sector. The scrutiny revealed no evidence that these programs had been executed, raising alarm over potential misallocation of public funds.
The Ghost Contractors and Non-Existent Projects
One of the most concerning revelations was that the ministry had seemingly engaged non-existent contractors to carry out projects. These so-called "ghost contractors" were listed in the budget, but no physical evidence of their work could be found. This raises suspicions of corruption and financial mismanagement, as funds may have been allocated for projects that were never completed or, in some cases, never even existed.
Zainab Gimba described these as “ghost projects”, warning that they represent a significant misuse of public resources. She pointed out that while administrative and recurrent costs for 2024 had risen sharply, no tangible outputs or activities were documented to justify these increases. This apparent discrepancy suggests that funds intended for vital projects may have been diverted for personal gain or used inefficiently.
Violation of Financial Regulations and the Fiscal Responsibility Act
The committee also raised concerns regarding the violation of Nigeria’s Fiscal Responsibility Act, which mandates strict adherence to accountability and the effective use of public resources. The act requires ministries and agencies to ensure that project expenditures are justified by documented evidence of work, and that no funds are disbursed without proper oversight.
However, the committee found several projects, particularly those related to the Ajaokuta Steel Company, that failed to meet the criteria set by the Act. In addition, numerous expenditures did not comply with Nigeria’s Financial Regulations, which require full documentation and accountability for all funds disbursed. This has raised significant concerns about the management practices within the ministry and the potential misuse of taxpayer money.
Call for Forensic Audit and Greater Accountability
In response to these troubling findings, Zainab Gimba called for an independent forensic audit of the ministry’s financial records. She recommended that an external auditing firm be engaged to thoroughly investigate the ministry’s expenditures and contracts awarded in 2024, particularly those linked to non-existent projects.
She also pledged to enhance oversight in 2025 to prevent such financial irregularities from recurring. This includes a focused effort on ensuring that the ministry’s expenditures are more transparent and aligned with Nigeria’s development goals for the steel industry.
Senate Committee Chair Calls for Capital Project Focus
Alongside Gimba, the Chairman of the Senate Committee on Steel Development, Patrick Ndubueze, also expressed grave concerns over the inefficiencies within the ministry. Ndubueze emphasized the need for the ministry to prioritize capital projects, such as infrastructure development—rather than focusing on what he referred to as wasteful recurrent expenses. He stressed that the growth of Nigeria’s steel industry is crucial to the nation’s economic progress, urging the ministry to invest in long-term infrastructure that will contribute to industrial growth.
Minister of Steel Development Pledges to Address Issues
In response to the committee's findings, Shuaibu Audu, the Minister of Steel Development, assured the committee that corrective measures would be implemented. He vowed to address the issues raised, including taking steps to ensure better financial management and more transparent execution of future projects under the 2025 budget.
The ministry’s commitment to improving its performance and tackling financial mismanagement was met with cautious optimism from the committee members. However, they emphasized that meaningful reforms must be put in place to ensure the accountability of public funds and the sustainability of the steel sector in Nigeria.
